Penalty notice vagueness under section 274 read with section 271(1)(c) makes the penalty unsustainable.

A penalty notice under section 274 read with section 271(1)(c) must specify the precise charge, namely concealment of income or furnishing inaccurate particulars. An omnibus or vague notice that does not inform the assessee of the exact default is fatal to the penalty proceedings, and the defect is treated as incurable. On that basis, the penalty was held unsustainable and deleted.

---

---

Issues: Whether a penalty notice issued under section 274 read with section 271(1)(c) of the Income-tax Act, 1961, which does not specify the exact charge, is valid and whether the resulting penalty can be sustained.

Analysis: The notice was found to be omnibus in nature and did not clearly specify whether the alleged default was concealment of income or furnishing inaccurate particulars. In view of the binding precedent that a penalty notice must inform the assessee of the precise charge and that vagueness in the notice is fatal to the penalty proceedings, the defect was treated as incurable.

Conclusion: The penalty was held unsustainable and was deleted.

---