Specific misreporting charge under Section 270A is essential; an unspecified penalty notice cannot support the penalty order.

Section 270A distinguishes under-reporting from misreporting of income, with Section 270A(9) defining specific circumstances of misreporting. A notice issued under Section 274 read with Section 270A must identify the applicable limb or sub-clause so that the taxpayer is informed of the precise penalty charge. Where the notice does not specify the relevant sub-clause of Section 270A(9), a consequential penalty order based on that unspecified charge is unsustainable.

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Issues: Whether penalty proceedings under Section 270A were invalid because the notice under Section 274 read with Section 270A did not specify the applicable limb or sub-clause of Section 270A(9).

Analysis: Section 270A distinguishes under-reporting of income from misreporting of income and Section 270A(9) specifies the circumstances constituting misreporting. The Assessing Officer is required to identify the specific limb or sub-clause applicable to the assessee in the notice issued under Section 274 read with Section 270A. The notice in the present case was silent regarding the applicable sub-clause, and the penalty order proceeded on that defective and unspecified charge.

Conclusion: The penalty notice and the consequential penalty order were unsustainable for failure to specify the applicable limb or sub-clause of Section 270A(9).

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