notice u/s 274 r.w.s 271(1)(c)

Section 271(1)(c) of Income Tax Act 1961(“The Act”), empower to Income Tax Authority to levy penalty under the Act, if the assessee officer or commissioner appeal or the principal commission during the any proceeding is satisfied that assessee has concealed the particulars of his income or furnished inaccurate particulars of income, he may direct to Assessee shall pay by way of penalty ,sum which shall not be less than but which shall not exceed three times amount of tax sought to be evaded by reason of the concealment of particulars of income or furnished inaccurate particulars of Income.

In other words, Income tax authority may levy penalty, if any of the following conditions has satisfied.

1. Assessee has concealed the particulars of his Income.

2. Assessee has furnished inaccurate particulars of income.

Whereas it is settle proposition of law, “merely making a claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee
As per sec.

274. (1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard.

So, notice is served  to the assessee by giving him opportunity to protect himself.