Penalty cannot stand on a deeming addition alone unless concealment or clear default is specifically charged.

Penalty under concealment and non-compliance provisions was discussed in relation to additions made on stamp valuation under the deeming fiction of section 50C. The text states that where the assessee had disclosed the sale transaction and the addition arose only from valuation substitution, the ingredients of concealment or furnishing inaccurate particulars were not established, so penalty under section 271(1)(c) was deleted. It also notes that a vague notice under section 274, which did not specify the exact limb of default, together with an explained non-compliance, was insufficient to sustain penalty under section 271(1)(b), and that penalty was deleted.

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Issues: (i) Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the addition arose from adoption of stamp valuation under section 50C. (ii) Whether penalty under section 271(1)(b) of the Income-tax Act, 1961 was sustainable where the notice under section 274 did not specify the exact charge and the non-compliance was explained.

Issue (i): Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the addition arose from adoption of stamp valuation under section 50C.

Analysis: The penalty under section 271(1)(c) was founded on an addition made by applying the deeming fiction in section 50C. The underlying reasoning accepted that the assessee had disclosed the relevant sale transaction and that the addition flowed from valuation substitution, not from a finding that the actual consideration was concealed or that inaccurate particulars were furnished. Penalty cannot follow merely because an addition is sustained on the basis of a deeming provision, unless the ingredients of concealment or furnishing of inaccurate particulars are established.

Conclusion: Penalty under section 271(1)(c) was not leviable and was deleted.

Issue (ii): Whether penalty under section 271(1)(b) of the Income-tax Act, 1961 was sustainable where the notice under section 274 did not specify the exact charge and the non-compliance was explained.

Analysis: The notice for penalty under section 271(1)(b) was found to be vague because the relevant limb of default was not specifically indicated. The failure to comply was also treated as not intentional in view of the assessee's family circumstances. In such circumstances, the foundation for penalty was held to be unsustainable.

Conclusion: Penalty under section 271(1)(b) was not sustainable and was deleted.

Final Conclusion: Both penalties were annulled, and the assessee succeeded in both appeals.

Ratio Decidendi: A penalty for concealment or non-compliance cannot be sustained unless the statutory ingredients are specifically made out and the charge is clearly communicated; an addition based only on a deeming provision does not by itself justify concealment penalty.

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