TDS verification proceedings was carried out at the assessee’s premises and during the course of such verification, it was found the assessee had not deducted TDS while making payment to M/s AD Education & Research Allahabad. Thereafter, during the course of proceedings U/s 201(1) r.w.s. 201(1A) of the IT Act, the Assessing Officer held that certain amount paid by the assessee was commission for services provided in procurement of students which was liable for TDS U/s 194H of the Act wherein TDS @ 10% should have been deducted by the assessee. Since no TDS was deducted,  demand of Rs. 99,850/- towards short fall in TDS and interest U/s 201(1A) amounting to Rs. 11,781/- was raised on the assessee vide order dated 31.10.2012. Thereafter penalty was levied u/s 271C. On appeal, CIT(A) confirmed the penalty. Before the Tribunal, the Assessee contended that the penalty order passed by the ld. JCIT, TDS was barred by limitation. It was submitted that in the instant case, ld. DCIT, TDS while passing the order U/s 201(1) r.w.s 201(1A) of the Act dated 31.10.2012 has initiated the penalty proceeding and therefore, the penalty order should be passed latest by 30.4.2013 whereas the order has been actually passed on 29.08.2013. Alternatively, it was submitted that JCIT(TDS) issued the show-cause on 11.01.2013 and based on the same, the penalty order can be passed latest by 31.7.2013. It was accordingly submitted that the order so passed U/s 271C of the Act is barred by limitation and deserves to be quashed. The Tribunal observed that from the order passed u/s 201(1) r.w.s. 201(1A) dated 31.10.2012, it is clear that a reference was being made to the JCIT (TDS) for initiation of penalty proceeding U/s 271C of the Act and the said reference was actually made vide AO’s letter dated 22.01.2013 to JCIT(TDS). Thereafter, the JCIT(TDS) initiated the penalty proceedings u/s 271C by way of issuance of notice dated 11.02.2013 to the assessee and the penalty order u/s 271C was thereafter passed on 29.08.2013 which is well within the limitation period prescribed U/s 275(1)(c) of the Act. The Tribunal held that the contention that the AO while passing the order u/s 201(1) r.w.s. 201(1A) has initiated the penalty proceedings was not factually correct as there is no notice which has been issued by the AO to the assessee. Secondly, the contention of the ld AR that the initiation of the penalty proceedings should be reckoned from the date when the reference was made by the AO to JCIT(TDS) cannot be accepted as the initiation of such proceedings have to be by way of issuance of a notice to the assessee and not by mere reference from the AO to JCIT(TDS). The Tribunal thus held that penalty order was within time and not barred by limitation. (ITA no. 870/JP/2018 dt. 06.02.2019 AY 2012-13)