After the search and seizure operations and impounding of documents, the assessee declared certain undisclosed income which was added to the income disclosed in the returns apart from certain other additions. In the assessment order, the Assessing Officer mentioned that penalty proceeding under section 271(1)(c) had been initiated and show cause notice under section 274 for imposing penalty under section 271(1)(c) read with Explanation 5A was being issued separately. The assessment orders were followed by notices under section 271(1)(c) read with section 274. The respondent/assessee participated in the penalty proceedings for both the assessment years i.e. assessment years 2006-07 and 2007-08 and made submissions. The Assessing Officer considered the submissions of the assessee and imposed a penalty under section 271(1)(c) read with Explanation 5A for both the assessment years. The Commissioner (Appeals) dismissed the assessee’s appeal against levy of penalty. The Tribunal cancelled the penalty on the ground that the show cause notice under section 274 was defective as it did not spell out the grounds on which the penalty was sought to be imposed. On appeal by Revenue the Court held that  when Assessing Officer had recorded in assessment order particulars of concealed income/undisclosed income of assessee and on that basis initiated penalty proceeding under section 271(1)(c), then consequential notice under section 274 issued by Assessing Officer to assessee to afford him opportunity of hearing, was specifically a notice for penalty for concealment of particulars of income/undisclosed income. Such a notice complied with principles of natural justice and was a valid notice under section 274 and Tribunal had committed a manifest error of law by setting aside penalty orders on ground that grounds for imposition of penalty were not mentioned in show cause notice under section 274 and thus, show cause notice was defective.    A fiscal statue has to be interpreted on the basis of language used therein and not dehors the same. No words ought to be added or deleted. Only the language used in the statue ought to be considered so as to ascertain proper meaning and intent of the legislation. The court is to ascribe natural and ordinary meaning to the words used by the legislature and the court ought not, under any circumstances, to substitute its own impressions and ideas in place of legislative intent as is available from a plain reading of the statutory provisions, vide Orissa State Warehousing Corpn. v. CIT (1999) 103 Taxman 623/237 ITR 589/ /4 SCC 197  (para 40).  When the language is plain and unambiguous and admits of only one meaning, no question of construction of a statue arises, that the Act speaks for itself vide State of Uttar Pradesh v. Dr. Vijay Anand Maharaj AIR 1963 SC 946 and Arul Nadar v. Authorised Officer, Land Reforms [1998] 7 SCC 157 (para 5). It is well known principle of construction of a statue that when the language used in the statue is unambiguous and on a plain grammatical meaning being given to the words in the statue, the end result is neither arbitrary nor irrational nor contrary to the object of the statue, then it is the duty of the court to give effect to the words used in the statue as the words declare the intention of the law making for best vide Jagdish Ch. Patnaik v. State of Orissa [1998] 4 SCC 456 (para 24). In Molar Mal v. Kay Iron Works (P.) Ltd. [2000] 4 SCC 285 (Para 12,15) Hon’ble Supreme Court observed that normally the courts will have to follow the rule of literal construction which rule enjoins the court to take the words as used by the legislature and to give it the meaning which naturally implies. An exception to this rule is that when an application of literal construction of the words in the statue leads to absurdity, inconsistency or when it is shown that the legal context in which the words are used or by reading the statue as a whole it requires a different meaning. In view of these settled principles of law, provisions of the Explanation 5A to Section 241(1) has to be given full effect.  The order of Tribunal is to be set aside and the matter is to be remanded to the Tribunal with direction to decide same on merit, in accordance with law.  (AY-2006-07,  2007-08)