Section 472
Section 472: bar of limitation for imposing penalties
Section 472 is the limitation provision for penalty orders under Chapter XXI - it fixes a six-month window, measured from the end of a relevant quarter, within which the penalty order must be passed, and explains how that window shifts when the underlying assessment is under appeal or revision.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
The six-month limit
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:
- The proceedings, in the course of which action for imposing the penalty was initiated, are completed - if the relevant assessment or other order is not the subject-matter of an appeal under section 356 or 357 or 362.
- The order of revision is passed - if the relevant assessment or other order is the subject-matter of revision under section 377 or 378.
- The order of appeal is received by the jurisdictional Principal Commissioner or Commissioner - if the relevant assessment or other order is the subject-matter of an appeal under section 356 or 357 or 362.
- Notice for imposition of penalty is issued, in any other case.
Revising the penalty order after appeal or revision
The order imposing, enhancing, reducing or cancelling a penalty, or dropping the penalty proceedings, may be revised based on the assessment as revised by giving effect to an order under section 356, 357, 362, 365 or 367, or a revision under section 377 or 378, where the relevant assessment or other order is the subject-matter of an appeal or revision under those sections.
Conditions for that revised order
No order imposing, enhancing, reducing or cancelling a penalty, or dropping the proceedings for imposing a penalty, under this revision power shall be passed:
- Unless the assessee has been heard, or has been given a reasonable opportunity of being heard.
- After the expiry of six months from the end of the quarter in which the order under section 356, 357, 362, 365 or 367 is received by the jurisdictional Principal Commissioner or Commissioner, or the order of revision under section 377 or 378 is passed.
Cross-reference and exclusions from the limitation period
Section 471(2) - on prior approval of the Joint Commissioner - applies to an order imposing, enhancing or reducing a penalty under this section.
In computing the limitation period, the following are excluded:
- The time taken in giving the assessee an opportunity to be re-heard under section 244(2).
- The period beginning on the date a court order or injunction granted a stay on the penalty-levy proceeding, and ending on the date the jurisdictional Principal Commissioner or Commissioner received a certified copy of the order vacating that stay.
Frequently asked questions
What is the basic time limit for passing a penalty order under Chapter XXI?
Six months from the end of the quarter in which the relevant event occurs (completion of proceedings, receipt of an appeal order, an order of revision, or issue of the penalty notice, depending on the case), as set out in Section 472(1).
Does the time limit exclude any period?
Yes - it excludes the time taken to give the assessee an opportunity of being re-heard under section 244(2), and any period during which a court stay on the penalty-levy proceeding was in force.
Can a penalty order be revised after an appeal is decided?
Yes - Section 472(2) allows the penalty order to be revised based on the assessment as revised on appeal or revision, subject to the assessee being heard and the six-month time limit in Section 472(3).
Related sections
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Talk to our tax team about a penalty proceedingLast updated 9 September 2026