The penalty notice does not say whether I concealed income or filed inaccurate particulars. Does that matter?
It does. A penalty notice that does not specify which limb is alleged is reported as defective — you cannot answer a charge that has not been made.
Decided by the Supreme Court (Anil R. Dave J and L. Nageswara Rao J) on 2016-08-05, reported as [2016] 73 taxmann.com 248 (SC); (2016) 242 Taxman 180 (SC); Petition for Special Leave to Appeal (C) CC No. 11485 of 2016; below, CIT, Bangalore v. SSA'S Emerald Meadows [2016] 73 taxmann.com 241 (Kar.). It bears on section 271(1)(c), section 274 of the Income Tax Act 1961, in Penalty matters.
The first thing to check on any 271(1)(c) notice, before touching the merits. Officers often issue a printed form with neither limb struck out.
Binding on every court and authority in India.
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For assessment year 2009-10 the Assessing Officer issued a notice under s.274 read with s.271(1)(c) which did not state whether penalty was proposed for concealment of particulars of income or for furnishing inaccurate particulars. The Tribunal held the notice bad in law on the authority of the Karnataka High Court's Division Bench decision in CIT v. Manjunatha Cotton & Ginning Factory. The Revenue appealed to the Karnataka High Court, which dismissed the appeal in IT Appeal No. 380 of 2015 on 23 November 2015, and then filed a special leave petition.
The Revenue's special leave petition was dismissed in three lines - delay condoned, no merit found in the petition, petition dismissed - with no reasons given. Below, the Karnataka High Court had itself given no independent reasoning: it recorded that the Tribunal had allowed the assessee's appeal on the authority of its own Division Bench in Manjunatha Cotton, held that the matter was covered by that judgment, and dismissed the Revenue's appeal because no substantial question of law arose. The proposition - that a s.274 notice which does not specify whether penalty is for concealment of particulars or for furnishing inaccurate particulars is bad in law - is Manjunatha Cotton's, and this case adds only that the Revenue's challenge to it failed at both levels.
Neither Court reasoned the point. The Tribunal had held the notice under s.274 read with s.271(1)(c) bad in law because it did not specify which limb of s.271(1)(c) was invoked, relying on the Division Bench decision in CIT v. Manjunatha Cotton & Ginning Factory. The Revenue's appeal to the High Court raised three questions, including whether the retrospective amendment of s.271(1B) cured the defect and whether the assessment order rather than the notice should be looked at; the High Court did not address them, holding simply that the matter was covered by its Division Bench and that no substantial question of law arose. The Supreme Court then dismissed the special leave petition without reasons, so the Manjunatha principle was left undisturbed rather than approved.
We do not find any merit in this petition. The special leave petition is, accordingly, dismissed.
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Handle my notice → Ask a CA on WhatsAppIt does. A penalty notice that does not specify which limb is alleged is reported as defective — you cannot answer a charge that has not been made. This was decided by the Supreme Court (Anil R. Dave J and L. Nageswara Rao J) and bears on section 271(1)(c), section 274 of the Income Tax Act 1961. It is reported as [2016] 73 taxmann.com 248 (SC); (2016) 242 Taxman 180 (SC); Petition for Special Leave to Appeal (C) CC No. 11485 of 2016; below, CIT, Bangalore v. SSA'S Emerald Meadows [2016] 73 taxmann.com 241 (Kar.). The first thing to check on any 271(1)(c) notice, before touching the merits. Officers often issue a printed form with neither limb struck out. If it applies to you, the first step is this: Look at the notice. Is the inapplicable limb struck out?
For assessment year 2009-10 the Assessing Officer issued a notice under s.274 read with s.271(1)(c) which did not state whether penalty was proposed for concealment of particulars of income or for furnishing inaccurate particulars. The Tribunal held the notice bad in law on the authority of the Karnataka High Court's Division Bench decision in CIT v. Manjunatha Cotton & Ginning Factory. The Revenue appealed to the Karnataka High Court, which dismissed the appeal in IT Appeal No. 380 of 2015 on 23 November 2015, and then filed a special leave petition. The matter was decided on 2016-08-05 by the Supreme Court (Anil R. Dave J and L. Nageswara Rao J). On those facts the Supreme Court held as follows. The Revenue's special leave petition was dismissed in three lines - delay condoned, no merit found in the petition, petition dismissed - with no reasons given. Below, the Karnataka High Court had itself given no independent reasoning: it recorded that the Tribunal had allowed the assessee's appeal on the authority of its own Division Bench in Manjunatha Cotton, held that the matter was covered by that judgment, and dismissed the Revenue's appeal because no substantial question of law arose. The proposition - that a s.274 notice which does not specify whether penalty is for concealment of particulars or for furnishing inaccurate particulars is bad in law - is Manjunatha Cotton's, and this case adds only that the Revenue's challenge to it failed at both levels.
Neither Court reasoned the point. The Tribunal had held the notice under s.274 read with s.271(1)(c) bad in law because it did not specify which limb of s.271(1)(c) was invoked, relying on the Division Bench decision in CIT v. Manjunatha Cotton & Ginning Factory. The Revenue's appeal to the High Court raised three questions, including whether the retrospective amendment of s.271(1B) cured the defect and whether the assessment order rather than the notice should be looked at; the High Court did not address them, holding simply that the matter was covered by its Division Bench and that no substantial question of law arose. The Supreme Court then dismissed the special leave petition without reasons, so the Manjunatha principle was left undisturbed rather than approved. In the words reproduced by the source cited on this page: "We do not find any merit in this petition. The special leave petition is, accordingly, dismissed." The decision followed or applied CIT v Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Kar).
It was decided by the Supreme Court on 2016-08-05 and is reported as [2016] 73 taxmann.com 248 (SC); (2016) 242 Taxman 180 (SC); Petition for Special Leave to Appeal (C) CC No. 11485 of 2016; below, CIT, Bangalore v. SSA'S Emerald Meadows [2016] 73 taxmann.com 241 (Kar.). Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 271(1)(c), section 274, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's special leave petition was dismissed in three lines - delay condoned, no merit found in the petition, petition dismissed - with no reasons given. Below, the Karnataka High Court had itself given no independent reasoning: it recorded that the Tribunal had allowed the assessee's appeal on the authority of its own Division Bench in Manjunatha Cotton, held that the matter was covered by that judgment, and dismissed the Revenue's appeal because no substantial question of law arose. The proposition - that a s.274 notice which does not specify whether penalty is for concealment of particulars or for furnishing inaccurate particulars is bad in law - is Manjunatha Cotton's, and this case adds only that the Revenue's challenge to it failed at both levels. It arises in Penalty matters, on section 271(1)(c), section 274 of the Income Tax Act 1961, and was decided by Anil R. Dave J and L. Nageswara Rao J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If not, take the point in the very first reply — do not save it for appeal. Keep the original notice; the defect is on its face.
Still good law. Still being applied: the Delhi High Court in PCIT-7 v Virtual Software and Training Pvt Ltd (3 February 2026) cited it in dismissing the Revenue's appeal, holding that a s.274 notice which fails to specify the charge vitiates the penalty, since concealment and furnishing inaccurate particulars are distinct charges. The doctrine is not uniform at Tribunal level — some benches (e.g. ITAT Indore, Dwarka Prasad Tayal, 10 July 2026) reach the same result on other authorities — but the principle is intact. Its reach is limited to assessment years up to 2016-17, because s.271(1)(c) is inoperative for AY 2017-18 onwards. Correction (2026-09-09): an earlier version of this note described the decision as "still being applied as binding". That overstates what this document is. The order was read in full: "Delay condoned. We do not find any merit in this petition. The special leave petition is, accordingly, dismissed. Pending application, if any, stands disposed of." Four sentences, no reasons, no numbered paragraphs - a non-speaking dismissal of a special leave petition at the admission stage with delay condoned. On Kunhayammed v State of Kerala (2000) 245 ITR 360 (SC) such a dismissal neither attracts Article 141 nor merges the judgment below into an order of the Supreme Court, so it is not binding authority for the specify-the-charge proposition and lays down no law. The authority for that proposition is the Karnataka High Court's reasoning in CIT v Manjunatha Cotton & Ginning Factory (and the decision below at [2016] 73 taxmann.com 241 (Kar.)); this order records only that the Revenue's challenge to it failed at the admission stage. The later decisions noted above are applying that principle, not this order. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This is the dismissal of a special leave petition without reasons, not a speaking judgment, and the High Court order below is itself only a holding that no substantial question of law arises. Neither is binding ratio for the proposition; the substantive authority is the Karnataka High Court's reasoning in Manjunatha Cotton, which is in this library as its own entry. Cite this case for the fact that the Revenue's challenge failed at both levels, not as an apex-level statement of the rule. Supreme Court: Special Leave to Appeal (C) No. 11485 of 2016, Anil R. Dave and L. Nageswara Rao JJ, 5 August 2016. Karnataka High Court: IT Appeal No. 380 of 2015, Vineet Saran and S. Sujatha JJ, 23 November 2015. Note also that the Revenue's argument that the retrospective amendment of s.271(1B) cured the defect was raised as a substantial question before the High Court and was never answered. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's special leave petition was dismissed in three lines - delay condoned, no merit found in the petition, petition dismissed - with no reasons given. Below, the Karnataka High Court had itself given no independent reasoning: it recorded that the Tribunal had allowed the assessee's appeal on the authority of its own Division Bench in Manjunatha Cotton, held that the matter was covered by that judgment, and dismissed the Revenue's appeal because no substantial question of law arose. The proposition - that a s.274 notice which does not specify whether penalty is for concealment of particulars or for furnishing inaccurate particulars is bad in law - is Manjunatha Cotton's, and this case adds only that the Revenue's challenge to it failed at both levels.
TaxSphere, “CIT v SSA's Emerald Meadows”, https://taxnotice.vittsphere.com/caselaw/case/cit-v-ssa-emerald-meadows/ (validity last checked 2026-08-25)
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