The assessee, Moraj Group Hospitalities Inc., appealed against the penalty of ₹24,72,000 levied under section 271(1)(c) for AY 2015-16, which arose from an addition of ₹80 lakhs made in reassessment relating to a loan from Dhanvi Corporation. The assessee argued that the penalty order and notices were invalid because the Assessing Officer failed to specify which of the two distinct charges—concealment of income or furnishing inaccurate particulars—was being invoked. Both the assessment order and the penalty notices used the expression “concealed the particulars of income and furnished inaccurate particulars”, which the assessee contended showed non-application of mind, contrary to law requiring the AO to identify one clear charge. It was further argued that the AO did not properly record satisfaction while initiating penalty, the CIT(A) relied mechanically on the AO’s order, and no meaningful opportunity of hearing was provided—thus violating natural justice and the provisions of the Income Tax Act, sections 274 and 275. The Tribunal examined the assessment order, both penalty notices, and the penalty order, all of which repeatedly used “and” instead of “or”, thereby clubbing two mutually exclusive offences. Relying on binding precedents—including New Sorathia Engineering 155 taxman 513 (Guj), Manu Engineering 122 ITR 306, N. Suseelan ITA No.2389/AHD/2006, dated 19.03.2009, and critically the Bombay High Court’s landmark judgment in Mohd. Farhan A. Shaikh 25 taxmann.com 253 (Bom), which held that an ambiguous or non-specific penalty notice is fatal and void—the ITAT held that the notice and resulting penalty order were invalid. The Tribunal also distinguished the Revenue’s reliance on Veena Estate (P) Ltd. 158 taxmann.com 341 (Bom), noting that the case dealt with highly peculiar facts where the defect in notice was questioned after 20+ years, unlike the present case. Since the AO had failed to specify the precise limb of section 271(1)(c) and instead sought to apply both the limbs, the penalty proceedings were held to be vitiate by the ITAT and deleted the entire penalty and allowed the assessee’s appeal