Section 115JC of the Income Tax Act

A penalty levied under section 271(1)(c) of the Income-tax Act is unsustainable if it is initiated on one limb (e.g., concealment of income) but ultimately levied on the other limb (e.g., furnishing inaccurate particulars). This also applies if the initial penalty notice is vague or ambiguous regarding the specific charge.

Sun Export Corporation held that any ambiguity in a tax exemption provision or notification must be interpreted in favor of the assessee or the subject.

For the applicability of Section 271(1)(c) penalty, the Assessing Officer must be satisfied that the assessee concealed income or furnished inaccurate particulars; however, this satisfaction is not required to be recorded in a particular manner or reduced to writing.

For a penalty to be imposed under Section 271(1)(c) of the Income Tax Act, all statutory conditions specified in that section must explicitly exist. The liability arises when the particulars of income disclosed in the return of income are found to be inaccurate.

The Assessing Officer must clearly indicate whether penalty proceedings are being initiated for furnishing inaccurate particulars of income or for concealment of income, as these carry different connotations.

A notice imposing penalty under section 271(1)(c) of the Income Tax Act is invalid if it shows non-application of mind by the Assessing Officer regarding the specific grounds for levying the penalty.

When interpreting an exemption notification under a fiscal statute, the principle that an obscure provision should be construed in favour of the assessee does not apply. Instead, exemption notifications must be interpreted strictly, and the burden of proving their applicability rests solely on the assessee.