Vague penalty notice under section 270A vitiates misreporting proceedings where the exact limb of charge is not specified.

Penalty under section 270A was unsustainable because the show-cause notice did not specify the exact limb or clause of misreporting alleged against the assessee. The notice was left omnibus and ambiguous, with the inapplicable portion not struck off and no precise charge identified in the assessment or penalty orders. Applying the principle that a penalty notice must clearly inform the taxpayer of the allegation, the Tribunal held that such vagueness showed non-application of mind and vitiated the proceedings. The penalty was deleted.

---

---

Issues: Whether penalty under section 270A of the Income-tax Act, 1961 could be sustained when the show-cause notice did not specify the exact limb or clause of misreporting alleged against the assessee.

Analysis: The penalty proceedings were initiated and concluded without the notice striking off the inapplicable portion or identifying the specific clause of section 270A(9) allegedly breached. The assessment order and penalty order showed that the charge was not made with precision, and the notice therefore remained omnibus and ambiguous. Relying on the settled principle that a penal notice must clearly inform the taxpayer of the exact allegation, the Tribunal applied the rule that vagueness in a mandatory penalty notice reflects non-application of mind and vitiates the proceedings.

Conclusion: The penalty under section 270A was held unsustainable and was directed to be deleted.

---