Notice Particularity: failure to specify or strike off limb under section 271(1)(c) invalidates the penalty, resulting in quashing.

Issue concerns validity of penalty proceedings under section 271(1)(c) where penalty notices did not specify or strike off the inapplicable limb (concealment of income versus furnishing inaccurate particulars). Applying binding precedent that a notice must indicate which limb is invoked, the Tribunal treated the notices as deficient and held the defect vitiated the proceedings; the penalty was quashed and the revenue's appeal dismissed with the assessee's cross-objection allowed.

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Issues: Whether penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 is valid where the penalty notices did not specify or strike off the irrelevant limb (i.e., whether the notices indicated whether the proceedings were for concealment of income or for furnishing inaccurate particulars of income).

Analysis: Copies of the penalty notices issued on 24.09.2024 and 27.09.2024 show that the AO did not indicate which limb of section 271(1)(c) was invoked and did not strike off the inapplicable limb. Reliance is placed on binding authority of the jurisdictional High Court establishing that a penalty notice under section 271(1)(c) that fails to specify or strike off the irrelevant limb is invalid. Applying that principle to the notices before the Tribunal, the notices are deficient and vitiate the penalty proceedings.

Conclusion: Penalty of Rs. 71,51,527/- imposed under section 271(1)(c) of the Income-tax Act, 1961 is quashed and set aside; the revenue's appeal is dismissed and the assessee's cross objection is allowed.

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