Says who?
The grounds are that the penalty demanded etc. circumstances of the case'. The circumstances here being that the authority is barred from serving a PCN, and therefore demanding a penalty, by virtue of s6 of the London Local Authorities' etc. Act, reproduced below:
6 Limitation on service of penalty charge notice
(1)Subject to the provisions of this section, no penalty charge notice may be served under this Act after the expiry of the period of 28 days beginning with the date on which the alleged contravention or failure to comply occurred.
(2)Subject to the provisions of this section, where—
(a)a penalty charge notice has been cancelled under paragraph 2 of Schedule 1 to this Act; or
(b)a penalty charge notice has been cancelled in compliance with a direction given by a traffic adjudicator under paragraph 4(2) of the said Schedule; or
©a penalty charge notice is deemed to have been cancelled under paragraph 7(8)© of the said Schedule (deemed cancellation where a statutory declaration under paragraph 7(2)(a) of that Schedule is served under paragraph 7(1)©),
the borough council or Transport for London, as the case may be, may not serve a fresh penalty charge notice after the expiry of the period of 28 days from the date of the cancellation of the penalty charge notice or, in a case falling within paragraph © above, the date on which that council or body are served with notice under paragraph 7(8)(d) of the said Schedule.
If the council believe they are so entitled then the burden lies with them to establish which of the conditions applies and in whichever case to provide sufficient detail such that their compliance with the requirement to serve a 'fresh penalty notice..within 28 days..' may be examined.
But as I posted in the other place, make use of your time and contact the dealer to see whether they've had correspondence with the council.
Your V5C arriving in Feb. 2023 after you buying the vehicle new in October 2022, a contravention in Dec. 2022 and the late service of your PCN are hardly likely to be unconnected, are they?
Apologies for the emoticons, they've crept in under the radar!