Vague penalty notice under section 271(1)(c) invalidates proceedings when the charge is not clearly specified.

Penalty under section 271(1)(c) was held unsustainable where the section 274 notice was ambiguous and did not specify whether the charge was concealment of income or furnishing inaccurate particulars. Because the notice retained both limbs without striking off the inapplicable one, the assessee was not put on clear notice of the exact allegation, and the defect went to the root of the penalty proceedings. The penalty order also relied on both grounds. Applying the cited precedents, the penalty was deleted in favour of the assessee.

---

---

Issues: Whether the penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable when the show-cause notice did not specify whether the proceedings were for concealment of particulars of income or for furnishing inaccurate particulars of income.

Analysis: The penalty notice issued under section 274 read with section 271(1)(c) was found to be ambiguous because it mentioned both limbs of the provision without striking off the inapplicable portion. The penalty order also proceeded on both grounds. In such circumstances, the assessee was not put on clear notice of the exact charge, and the defect went to the root of the validity of the penalty proceedings. The decision was supported by the cited precedents holding that a vague notice of this nature renders the penalty unsustainable.

Conclusion: The penalty was not sustainable in law and was deleted in favour of the assessee.

---