Penalty under section 270A fails when the exact charge of under-reporting or misreporting is not specified.

Penalty under section 270A of the Income-tax Act was held unsustainable where the order failed to specify the exact limb of under-reporting or misreporting alleged against the assessee. The penalty proceedings were based on non-disclosure of interest income and referred generally to both section 270A(8) and section 270A(9), but the authority did not identify the precise clause or charge forming the basis of the levy. That omission was treated as fatal because the assessee was not informed of the exact allegation to meet. The ITAT Pune therefore held the penalty could not stand and decided the issue in favour of the assessee.

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Issues: Whether penalty under section 270A of the Income-tax Act, 1961 could be sustained when the order did not specify the exact limb of under-reporting or misreporting attracted by the assessee.

Analysis: The penalty order proceeded on alleged non-disclosure of interest income and invoked under-reporting and misreporting under section 270A(8) and section 270A(9), but the authorities did not identify the precise limb or clause forming the basis of the penalty. The omission to specify the exact charge was held to be fatal to the penalty proceedings, and the same principle was applied to the scheme of section 270A.

Conclusion: The penalty was not sustainable and the issue was decided in favour of the assessee.

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