Penalty notice must specify the exact charge; delayed immunity form filing cannot defeat relief when substantive conditions are met.

An omnibus penalty notice under section 274 read with section 271(1)(c) that does not strike off the irrelevant limb or specify whether concealment or furnishing of inaccurate particulars is alleged is treated as invalid for non-application of mind, and the resulting penalty cannot be sustained. Delay in filing Form No. 68 for immunity under section 270AA is a procedural lapse where the assessee has accepted the assessment, paid the demand, and not appealed; the delayed form does not defeat immunity when the substantive conditions are otherwise met. The penalty under section 270A was therefore not sustainable, and the assessees obtained relief.

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Issues: (i) Whether a penalty notice issued under section 274 read with section 271(1)(c) of the Income-tax Act, 1961 is invalid when the irrelevant portion is not struck off and the specific limb of concealment or furnishing of inaccurate particulars is not indicated. (ii) Whether delay in filing Form No. 68 for claiming immunity under section 270AA of the Income-tax Act, 1961 defeats the claim of immunity and sustains penalty under section 270A of the Income-tax Act, 1961.

Issue (i): Whether a penalty notice issued under section 274 read with section 271(1)(c) of the Income-tax Act, 1961 is invalid when the irrelevant portion is not struck off and the specific limb of concealment or furnishing of inaccurate particulars is not indicated.

Analysis: The notice did not specify the exact charge and retained both possible limbs in an omnibus form. The reasoning treats such a notice as reflecting non-application of mind and as contrary to the requirement of a precise and unambiguous notice before penalty consequences can follow. The defect is treated as fatal to the penalty proceedings.

Conclusion: The penalty initiated on the basis of the defective notice could not be sustained and was liable to be deleted in favour of the assessee.

Issue (ii): Whether delay in filing Form No. 68 for claiming immunity under section 270AA of the Income-tax Act, 1961 defeats the claim of immunity and sustains penalty under section 270A of the Income-tax Act, 1961.

Analysis: The assessee had accepted the assessment, paid the tax demand, and did not pursue an appeal, thereby complying with the substantive conditions for immunity. The delayed filing of Form No. 68 was treated as a procedural lapse because the form only evidences compliance and does not constitute the substantive foundation of the immunity provision. On the same reasoning, the mere disallowance of a deduction claim could not justify penalty where the assessee had otherwise complied with the statutory conditions.

Conclusion: The delay in filing Form No. 68 did not defeat immunity, and the penalty under section 270A was not sustainable; the decision is in favour of the assessee.

Final Conclusion: All the penalty levies under consideration were set aside, and the assessee obtained complete relief in the appeals.

Ratio Decidendi: An omnibus penalty notice that does not strike off the inapplicable limb is invalid for non-application of mind, and a delayed procedural form cannot defeat statutory immunity where the substantive conditions have been fulfilled.

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