Vague penalty notice under Income-tax law cannot sustain section 271(1)(c) proceedings without specifying the exact charge.

Penalty under section 271(1)(c) is unsustainable where the show-cause notice does not specify whether the allegation is concealment of income or furnishing inaccurate particulars. The assessee must receive a clear and precise charge to prepare an effective defence, and a vague notice on this material aspect vitiates the penalty proceedings. On that basis, the penalty was treated as invalid and the assessee's challenge succeeded.

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Issues: Whether the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 was sustainable when the show-cause notice did not specify whether the proposed penalty was for concealment of income or for furnishing inaccurate particulars.

Analysis: The show-cause notice did not state the specific limb on which penalty was proposed. In penalty proceedings under section 271(1)(c), the assessee must be informed of the precise charge so that an effective defence can be raised. A notice that is vague on this material aspect renders the penalty proceedings unsustainable.

Conclusion: The penalty was held to be invalid and the assessee's challenge succeeded.

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