Specific penalty charge requirement: an ambiguous notice for concealment or inaccurate particulars invalidates the penalty proceedings.

A penalty notice under Section 274 that uses "or" between concealment of income and furnishing inaccurate particulars, without identifying the specific charge under Section 271(1)(c), fails to provide clear notice of the allegation. The notes state that this defect indicates no definite satisfaction regarding the applicable statutory limb and vitiates the penalty proceedings. Applying strict construction of penal provisions and the jurisdictional Full Bench ruling, the penalty was deleted; a Revenue precedent was distinguished on its exceptional delay-related facts.

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Issues: Whether penalty for concealment of income or furnishing inaccurate particulars can be sustained where the notice initiating penalty proceedings did not specify the applicable limb under Section 271(1)(c) of the Income-tax Act, 1961.

Analysis: The notice issued under Section 274 of the Income-tax Act, 1961 employed "OR" between concealment of particulars of income and furnishing inaccurate particulars, without identifying the precise charge. This failed to give clear notice of the allegation to be met and reflected absence of a definite satisfaction regarding the statutory limb invoked. The jurisdictional Full Bench ruling on defective penalty notices applied; the Revenue's relied-upon decision was factually distinguishable because the objection there had been raised after an exceptional delay. Penal provisions require strict construction, and a clear satisfaction as to the specific default is indispensable for levy of penalty.

Conclusion: The unspecific notice vitiated the penalty proceedings; the penalty under Section 271(1)(c) of the Income-tax Act, 1961 was deleted in favour of the assessee.

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