Strict construction of penalty provisions defeats vague misreporting notice, and the section 270A(9) levy was quashed.

Penalty under section 270A(9) of the Income-tax Act could not be sustained where the Assessing Officer failed to specify which enumerated instance of under-reporting or misreporting in clauses (a) to (f) was attracted. The Tribunal noted that a vague reference to under-reporting in consequence of misreporting did not satisfy the statutory requirement, showed non-application of mind, and deprived the assessee of fair notice and natural justice. It applied the principle that penalty provisions must be strictly construed and cannot rest on an unspecified allegation. The penalty order was quashed.

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Issues: Whether penalty levied under section 270A(9) of the Income-tax Act, 1961 could be sustained when the Assessing Officer did not specify the particular instance of under-reporting or misreporting falling within clauses (a) to (f) of that provision.

Analysis: The penalty order stated only that the case involved under-reporting of income in consequence of misreporting, but did not identify the specific clause under section 270A(9) that was attracted. Since higher penalty for misreporting requires the authority to bring the assessee's conduct within one of the enumerated instances in clauses (a) to (f), omission to do so showed non-application of mind and rendered the levy unsustainable. The omission also offended the requirement of fair notice and the principles of natural justice. The Tribunal followed the earlier coordinate bench view that penalty provisions must be strictly construed and cannot be sustained on a vague invocation of misreporting.

Conclusion: The penalty order was quashed and the addition of penalty under section 270A(9) did not survive.

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