Defective penalty notice for unspecified charge invalidates income-tax penalties; section 292B cannot cure the omission.

Penalty notices under section 274 must specify the exact charge, because concealment of income and furnishing inaccurate particulars of income are distinct allegations. A notice that does not strike off the inapplicable limb is vague, offends natural justice, and reflects non-application of mind. Such a defect is not cured by section 292B. The same requirement applies to penalty proceedings under section 271AAB, as section 274 governs the notice framework for that penalty as well. On that basis, invalid notices could not sustain the penalties, and cancellation of the penalties was warranted.

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Issues: Whether penalty under section 271(1)(c) and section 271AAB of the Income-tax Act, 1961 could be sustained when the notice under section 274 did not specify whether the charge was concealment of income or furnishing inaccurate particulars of income, and whether section 292B could cure such defect.

Analysis: The penalty proceedings were founded on a notice that did not strike off the inappropriate limb and therefore did not make clear the exact charge to be met by the assessee. The governing principle is that, in penalty matters, the assessee must be put to notice of the precise ground, because concealment of income and furnishing inaccurate particulars of income are distinct charges. A vague or omnibus notice offends natural justice and shows non-application of mind. The defect is not a mere procedural irregularity curable under section 292B. The same principle applies to penalty under section 271AAB because the notice requirements under section 274 govern such penalty proceedings as well.

Conclusion: The penalty notices were invalid and the penalties could not be sustained; cancellation of the penalties was warranted.

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