Penalty under section 271(1)(c) fails where notice is vague and a fully disclosed bona fide claim is merely disallowed.

Penalty under section 271(1)(c) cannot be sustained where the section 274 notice does not specify whether the charge is concealment of income or furnishing inaccurate particulars; a vague notice denies the assessee a proper defence and is contrary to natural justice, so the penalty notice is invalid. Where a donation claim is fully disclosed in the return and the dispute concerns only its allowability, a bona fide but unsuccessful claim does not by itself justify penalty. On the stated facts, the penalty was deleted and did not survive.

---

---

Issues: (i) Whether penalty under section 271(1)(c) could be sustained when the notices under section 274 did not specify the exact limb of the charge. (ii) Whether penalty was leviable on the assessee's claim of donation when the claim was asserted to be bona fide and fully disclosed.

Issue (i): Whether penalty under section 271(1)(c) could be sustained when the notices under section 274 did not specify the exact limb of the charge.

Analysis: The notices issued by the Assessing Officer did not clearly state whether penalty was proposed for concealment of income or for furnishing inaccurate particulars. The Tribunal applied the settled principle that a penalty notice must apprise the assessee of the precise charge so that an effective defence can be raised. A vague notice is inconsistent with the statutory scheme and offends natural justice.

Conclusion: The penalty notices were invalid and were quashed.

Issue (ii): Whether penalty was leviable on the assessee's claim of donation when the claim was asserted to be bona fide and fully disclosed.

Analysis: The Tribunal noted that the assessee had disclosed the claim in the return and that the dispute related to the allowability of the claim, not to concealment of facts. It held that penalty proceedings are distinct from assessment proceedings and that a mere disallowance or an unsuccessful legal claim does not automatically justify penalty when the claim is bona fide and the particulars are not found to be false or inaccurate.

Conclusion: No penalty was leviable on the donation claim and the penalty was deleted.

Final Conclusion: The appeal succeeded and the penalty imposed under section 271(1)(c) did not survive.

Ratio Decidendi: A penalty under section 271(1)(c) cannot be sustained unless the notice specifies the exact statutory limb invoked and the Revenue establishes concealment or furnishing of inaccurate particulars on the facts disclosed by the assessee.

---