Penalty under section 270A requires a specific charge of under-reporting or misreporting; vague notices made the penalty unsustainable.

Penalty under section 270A could not be sustained because the assessment and penalty proceedings failed to specify whether the default was under-reporting or misreporting of income. The Tribunal followed the settled view that the statutory scheme treats those limbs distinctly and requires a clear charge before penalty can be imposed. As the notices and orders did not record a specific finding on the applicable limb, the penalty was held unsustainable and deleted; the revenue's appeal was dismissed.

---

---

Issues: Whether penalty under section 270A of the Income-tax Act, 1961 was sustainable when the assessment and penalty proceedings did not clearly specify the exact limb of default, namely under-reporting or misreporting of income.

Analysis: The penalty was founded on additions confirmed in quantum, but the notices and orders did not record a clear and specific finding as to which limb of section 270A had been invoked. The Tribunal noted the consistent view of the Delhi High Court and coordinate Benches that penalty under section 270A cannot be sustained unless the exact charge is specified, since the statutory scheme distinguishes between under-reporting and misreporting and the consequences differ. On the facts, the absence of a specific finding as to the applicable limb rendered the penalty unsustainable.

Conclusion: The penalty under section 270A read with section 274 was deleted, and the assessee succeeded; the revenue's appeal was dismissed on the same reasoning.

---