Specific penalty notice charges must be identified clearly to avoid vagueness and invalidate proceedings under Section 271(1)(c).

A penalty notice under Section 274 read with Section 271(1)(c) must identify whether the allegation is concealment of income or furnishing inaccurate particulars of income. Retaining both charges without striking out the inapplicable one leaves the assessee uncertain about the case to be answered and fails the requirement of a specific notice. The notes state that such vagueness makes the penalty proceedings legally unsustainable, resulting in quashing of the proceedings without examining the merits of the penalty.

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Issues: Whether penalty proceedings under Section 271(1)(c) were invalid because the notice under Section 274 did not specify the applicable charge of concealment of income or furnishing inaccurate particulars of income.

Analysis: A penalty notice under Section 274 read with Section 271(1)(c) must clearly identify the specific default alleged against the assessee. The notice in the present case retained both statutory charges without striking off either one, leaving the assessee uncertain about the allegation to be answered. Such vagueness rendered the penalty proceedings legally unsustainable and offended the requirement of a specific notice.

Conclusion: The penalty proceedings were invalid and were quashed without examination of the merits of the penalty.

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