Section 275 - Bar of limitation for imposing penalties - Income-tax Act, 1961

17 [Bar of limitation for imposing penalties. 275. (1) No order imposing a penalty under this Chapter shall be passed after the expiry of six months from the end of the quarter in which, (a) the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, if the relevant assessment or other order is not the subject matter of an appeal under section 246 or section 246A or section 253; (b) the order of revision under section 263 or section 264 is passed, if the relevant assessment or other order is the subject matter of revision under the said sections; (c) the order of appeal under section 246 or section 246A is received by the jurisdictional Principal Commissioner or Commissioner, if the relevant assessment or other order is the subject matter of an appeal under the said sections and no further appeal has been filed under section 253; (d) the order of appeal under section 253 is received by the jurisdictional Principal Commissioner or Commissioner, if the relevant assessment or other order is the subject matter of an appeal under the said section; (e) notice for imposition of penalty is issued, in any other case. (2) The order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be revised on the basis of assessment as revised by giving effect to the order passed under section 246 or section 246A or section 253 or section 260A or section 261 or revision under section 263 or section 264, where the relevant assessment or other order is the subject matter of an appeal or a revision under the said sections. (3) No order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty under sub-section (2) shall be passed (a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard; (b) after the expiry of six months from the end of the quarter in which the order passed under section 246 or section 246A or section 253 or section 260A or section 261 is received by the jurisdictional Principal Commissioner or Commissioner, or the order of revision under section 263 or section 264 is passed. (4) The provisions of sub-section (2) of section 274 shall apply to the order imposing or enhancing or reducing penalty under sub-section (2). (5) In computing the period of limitation for the purposes of this section, the following period shall be excluded: (a) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129; (b) the period commencing on the date on which stay on proceeding for levy of penalty was granted by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the jurisdictional Principal Commissioner or Commissioner. ] **************** NOTES:- 1. Substituted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971. 2. Renumbered by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. 3. Substituted for clauses (a) and (b) by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its substitution, clause (a) was amended by the Finance (No. 2) Act, 1977, w.e.f. 10-7-1978. 4. Words Deputy Commissioner (Appeals) or the omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 5. Inserted by the Finance Act, 2000, w.e.f. 1-6-2000. 6. Words Deputy Commissioner (Appeals) or the omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Earlier the quoted words were inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 7. Inserted by the Finance Act, 2003, w.e.f. 1-6-2003. 8. Inserted by the Finance Act, 2003, w.e.f. 1-6-2003. 9. Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006 . 10. Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989. 11. Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. 12. Inserted vide THE FINANCE (No. 2) ACT, 2014 w.e.f. 1st day of June, 2013. 13. Substituted vide THE FINANCE ACT, 2023 dated 31-03-2023 w.e.f. 01-04-2023 before it was read as, the Commissioner (Appeals) 14. Substituted vide THE FINANCE ACT, 2023 dated 31-03-2023 w.e.f. 01-04-2023 before it was read as, to the Commissioner (Appeals) 15. Omitted vide Section 83 of the Finance (No. 2) Act, 2024 dated 16-08-2024 w.e.f. 01-10-2024 before it was read as, 12 [Principal Chief Commissioner or] Chief Commissioner or 16. Omitted vide Section 83 of the Finance (No. 2) Act, 2024 dated 16-08-2024 w.e.f. 01-10-2024 before it was read as, 12 [Principal Chief Commissioner or] Chief Commissioner or 17. Substituted vide Section 88 of the Finance Act, 2025 dated 29-03-2025 w.e.f. 01-04-2025 before it was read as, 1 [Bar of limitation for imposing penalties. 275. 2 [(1)] No order imposing a penalty under this Chapter shall be passed- 3 [( a ) in a case where the relevant assessment or other order is the subject-matter of an appeal 14 [ to the Joint Commissioner (Appeals) or to the Commissioner (Appeals) ] under section 246 5 [or section 246A] or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of 13 [ the Joint Commissioner (Appeals) or the Commissioner (Appeals) ] or, as the case may be, the Appellate Tribunal is received by the 15 [****] 12 [Principal Commissioner or] Commissioner, whichever period expires later : 7 [ Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal 14 [ to the Joint Commissioner (Appeals) or to the Commissioner (Appeals) ] under section 246 or section 246A, and 13 [ the Joint Commissioner (Appeals) or the Commissioner (Appeals) ] passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of 13 [ the Joint Commissioner (Appeals) or the Commissioner (Appeals) ] is received by the 15 [****] 12 [Principal Commissioner or] Commissioner, whichever is later;] ( b ) in a case where the relevant assessment or other order is the subject-matter of revision under section 263 8 [or section 264], after the expiry of six months from the end of the month in which such order of revision is passed; ( c ) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later.] 9 [(1A) In a case where the relevant assessment or other order is the subject-matter of an appeal 14 [ to the Joint Commissioner (Appeals) or to the Commissioner (Appeals) ] under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253 or an appeal to the High Court under section 260A or an appeal to the Supreme Court under section 261 or revision under section 263 or section 264 and an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty is passed before the order of 13 [ the Joint Commissioner (Appeals) or the Commissioner (Appeals) ] or the Appellate Tribunal or the High Court or the Supreme Court is received by the 16 [****] 12 [Principal Commissioner or] Commissioner or the order of revision under section 263 or section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of 13 [ the Joint Commissioner (Appeals) or the Commissioner (Appeals) ] or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under section 263 or section 264: Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed- (a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard; (b) after the expiry of six months from the end of the month in which the order of 13 [ the Joint Commissioner (Appeals) or the Commissioner (Appeals) ] or the Appellate Tribunal or the High Court or the Supreme Court is received by the 16 [****] 12 [Principal Commissioner or] Commissioner or the order of revision under section 263 or section 264 is passed: Provided further that the provisions of sub-section (2) of section 274 shall apply in respect of the order imposing or enhancing or reducing penalty under this sub-section.] 10 [(2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any action initiated for the imposition of penalty on or before the 31st day of March, 1989.] 11 [ Explanation.- In computing the period of limitation for the purposes of this section,- ( i ) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129; ( ii ) any period during which the immunity granted under section 245H remained in force; and ( iii ) any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court, shall be excluded.]]