Penalty under section 270A fails when reassessment return is accepted without addition and the notice is vague.

Penalty under section 270A was held unsustainable where a return filed in response to section 148 was accepted without any addition and the Assessing Officer recorded no finding of under-reporting or misreporting. In the absence of any addition to the returned income, the factual basis for penalty proceedings was missing. The notice initiating penalty also failed to specify the exact limb of section 270A invoked, leaving the charge indeterminate. On these facts, penalty for under-reporting could not be maintained and was deleted.

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Issues: Whether penalty under section 270A was sustainable when the return filed in response to notice under section 148 was accepted without any addition and the notice did not specify the exact limb of section 270A attracted.

Analysis: The return filed in response to section 148 was accepted by the Assessing Officer without making any addition or recording any finding of under-reporting or misreporting in the returned income. In such circumstances, the basis for invoking penalty under section 270A was absent. The notice initiating penalty also did not specify the particular limb of section 270A, which left the charge indeterminate and weakened the validity of the penalty proceedings.

Conclusion: The penalty under section 270A was not sustainable and is deleted.

Ratio Decidendi: Where a return filed in response to reassessment proceedings is accepted without addition and the penalty notice does not clearly specify the exact statutory limb invoked, penalty for under-reporting of income cannot be maintained.

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