Vague penalty notice under section 270A invalid where it fails to specify the exact charge and cannot sustain the order.

A penalty notice under section 270A must specify the precise limb or sub-clause invoked so the assessee knows the exact charge. Where the notice is vague and does not identify the particular basis of penalty, it is treated as a foundational defect that cannot sustain the proceedings. Applying that principle, the Tribunal held the defective notice legally unsustainable and quashed both the initiation notice and the consequential penalty order as void ab initio in favour of the assessee.

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Issues: Whether a penalty notice issued under section 270A of the Income-tax Act, 1961, without specifying the precise limb or sub-clause invoked, is valid and can sustain the consequent penalty order.

Analysis: The notice initiating penalty under section 270A did not specify the particular limb under which the assessee was proceeded against. The Tribunal treated such an notice as vague and legally unsustainable, following the cited Delhi High Court view that a penalty initiation notice must clearly indicate the exact charge. In the absence of such specification, the penalty proceedings were held to suffer from a foundational defect and the resulting order could not stand.

Conclusion: The penalty notice and the consequent penalty order under section 270A were quashed as void ab initio, in favour of the assessee.

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