Assessment order having been passed on 30.12.2022 after obtaining prior approval of the Addl. CIT and satisfaction recorded therein for violation of s. 269SS, the limitation for levy of penalty u/s 271D expired on 30.06.2023 .Penalty order passed on 30.08.2023 held barred by limitation .CBDT Circular No. 10/2016 [F.NO.279/Misc./M-140/2015-ITJ], dated 26-4-2016, applied . Circular binding on the Department . AO’s satisfaction is mandatory precondition for initiation of penalty proceedings even if he is not the competent authority to impose penalty . JCIT/Addl. CIT cannot extend limitation by issuing notice at his convenience . Period of limitation to be computed from the date of recording of satisfaction by AO .  Tribunal held that  the expression “action for imposition of penalty is initiated” refers to recording of satisfaction by the AO and not to issuance of notice by the competent authority . Revenue’s contention rejected .  Penalty order quashed as time-barred. Relied on  CIT v. Jai Laxmi Rice Mills Ambala City [2016] 74 taxmann.com 22 /243 Taxman 174/ 386 ITR 719 (SC),  PCIT v. Thapar Homes Ltd [2024] 159 taxmann.com 450 (Delhi) (HC ), CIT v. Narayani & Sons (P) Ltd [2016] 73 taxmann.com 21 ( Cal)( HC) . Jagdish Chandra Suwalka v. JCIT [2023] 154 taxmann.com 504 /105 ITR 480 ( Jaipur) ( Trib) . Cross objection of assessee was allowed . ( AY .2021-22 ) ( ITA No.1899/Chny/2025 & No.65/Chny/2025,  dt.  30.10.2025)