Income Tax Act 2025: Section 472 for Tax Year 2026-27

Bar of limitation for imposing penalties

[Section-472 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]

Section 472(1) of Income Tax Act 2025

472(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 356 or 357 or 362;
• (b) the order of revision is passed, if the relevant assessment or other order is the subject-matter of revision under section 377 or 378;
• (c) 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;
• (d) notice for imposition of penalty is issued, in any other case.

Section 472(2) of Income Tax Act 2025

472(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 under section 356 or 357 or 362 or 365 or 367 or revision under section 377 or 378, where the relevant assessment or other order is the subject-matter of an appeal or revision under the said sections.

Section 472(3) of Income Tax Act 2025

472(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 under section 356 or 357 or 362 or 365 or 367 is received by the jurisdictional Principal Commissioner or Commissioner or the order of revision under section 377 or 378 is passed.

Section 472(4) of Income Tax Act 2025

472(4) The provisions of section 471(2) shall apply to the order imposing or enhancing or reducing penalty under this section.

Section 472(5) of Income Tax Act 2025

472(5) In computing the period of limitation for the purposes of this section, following period shall be excluded—

• (a) the time taken in giving an opportunity to the assessee to be reheard under the section 244 (2);
• (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 jurisdictional Principal Commissioner or Commissioner.

FAQs on Section 472 of Income Tax Act 2025

What is the time limit for passing a penalty order under Section 472(1)?
No order imposing a penalty shall be passed after the expiry of six months from the end of the quarter in which the triggering event (like completion of proceedings, receipt of appellate order, etc.) occurs.

When does the six-month limitation period begin in case of assessment proceedings without appeal?
It begins from the end of the quarter in which the assessment or other proceedings are completed, provided there is no appeal under sections 356, 357, or 362.

What is the time limit if the relevant order is under revision?
If the relevant assessment or other order is the subject of revision under section 377 or 378, the six-month limit starts from the end of the quarter in which the revision order is passed.

What if the case involves an appeal under sections 356, 357, or 362?
Then the limitation period begins from the end of the quarter in which the appellate order is received by the jurisdictional Principal Commissioner or Commissioner.

When does the limitation start in other miscellaneous cases?
In such cases, it begins from the end of the quarter in which notice for imposition of penalty is issued.

Can a penalty order be revised after initial imposition?
Yes, under Section 472(2), a penalty order can be revised based on a revised assessment order resulting from appellate or revision orders under specified sections.

What conditions must be met before passing a revised or fresh penalty order under Section 472(3)?
The assessee must be given a hearing or reasonable opportunity of being heard, and the revised order must be passed within six months from the end of the quarter in which the appellate or revision order is received or passed.

Are there any exclusions while computing the limitation period under Section 472?
Yes, exclusions include time taken for rehearing under section 244(2) and the period during which a court stay on penalty proceedings is in effect until the stay is vacated.

Does Section 471(2) apply to orders under Section 472?
Yes, as per Section 472(4), the provisions of Section 471(2) shall also apply to orders imposing, enhancing, or reducing penalties under Section 472.

Can the time limit extend due to court-ordered stay?
Yes, the period of stay by a court is excluded from the limitation computation, ending on the date the certified copy of the vacating order is received by the Commissioner.

Is opportunity of being heard mandatory in all penalty revisions or cancellations?
Yes, as per Section 472(3)(a), the assessee must be heard or given a reasonable opportunity of being heard before passing such orders.