CIT v. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (Supreme Court) is a landmark ruling where the Supreme Court held that mere making of a claim which is not sustainable in law does not by itself amount to furnishing inaccurate particulars or concealment of income. If the assessee has disclosed all material facts in the return and the claim is disallowed (e.g., a deduction/expenditure), penalty under Section 271(1)(c) cannot be imposed.

CIT v. Manjunatha Cotton and Ginning Factory (2014) 359 ITR 565 (Karnataka High Court)is also very important. The High Court ruled that the penalty notice issued u/s 274 read with s. 271(1)(c) must specifically mention whether the charge is for “concealment of income” or “furnishing inaccurate particulars of income”. A printed omnibus notice without striking off the inapplicable limb (or without specifying the exact charge) is invalid and vitiates the entire penalty proceedings.