Definite charge in penalty proceedings is essential; mismatch between concealment and inaccurate particulars vitiates section 271(1)(c) penalty.

Penalty under section 271(1)(c) requires a definite and consistent charge from initiation through the penalty order. Concealment of income and furnishing inaccurate particulars of income are distinct defaults, so a notice issued on one basis cannot be sustained if the final penalty order shifts to a different or mixed charge. Section 271(1B) cures only the absence of recorded satisfaction at the assessment stage when initiation is directed, but it does not dispense with a clear charge in the notice and penalty order. Section 292B cannot save a defect that goes to the root of the penalty proceedings. On the stated facts, the penalty was held unsustainable.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 is sustainable when the Assessing Officer initiated penalty for concealment of income, but imposed it for concealment of income/furnishing inaccurate particulars of income.

Analysis: The expressions concealment of particulars of income and furnishing inaccurate particulars of income denote different defaults. A clear charge must be conveyed at the stage of initiation and, more importantly, a clear and consistent finding must be recorded in the penalty order. Where the notice proceeds on a specific charge of concealment but the penalty order shifts to an uncertain or different charge, the defect goes to the root of the matter. The deeming fiction in section 271(1B) cures the requirement of recording satisfaction at the assessment stage once a direction for initiation of penalty is contained in the assessment order, but it does not dispense with the need for a definite charge in the penalty notice and penalty order. Section 292B cannot save a penalty order where the defect is fundamental and not merely procedural. On the facts, the actual default was treated as furnishing inaccurate particulars, whereas the notices and orders proceeded on concealment and then on both charges together.

Conclusion: The penalty was not sustainable and the referred question was answered in the affirmative in favour of the assessee.

Final Conclusion: A penalty order under section 271(1)(c) must rest on a definite and consistent charge, and a mismatch between the charge in initiation and the charge in imposition vitiates the penalty.

Ratio Decidendi: Penalty under section 271(1)(c) is invalid if the charge is not clearly and consistently specified and maintained from initiation through the penalty order, because concealment of income and furnishing inaccurate particulars are distinct defaults.

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