#Penalty Notice

ITAT Mumbai has ruled that a penalty notice under Section 271(1)(c) is void if it fails to clearly state whether the allegation is for concealment of income or furnishing inaccurate particulars. This failure violates the right to fair hearing and renders the proceedings legally unsustainable, impacting all taxpayers facing penalty proceedings under the Income Tax Act.

The ITAT Pune has set aside a Rs. 83,200 penalty for under-reporting, ruling that the Assessing Officer must explicitly identify which of the six misreporting limbs under Section 270A(1) applies. This establishes a critical procedural safeguard for taxpayers, ensuring penalties are not imposed on vague or generic allegations of misreporting.

The ITAT Delhi holds that a penalty notice under Section 271(1)(c) must unambiguously specify whether it relates to concealment or inaccurate particulars, failing which it is invalid.