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2015 (2) TMI 59 - AT - Income TaxMaintainability of the appeal - Tribunal jurisdiction to entertain an appeal filed against the order passed by the Director of Income-tax under section 271FA - Held that - The appellate jurisdiction always lies with the forum who is higher in rank than the forum whose order is under challenge; meaning thereby the appellate court or jurisdiction can examine the order of the inferior court and not of the court or authority who is equivalent in rank. In the instant case, undeniably the order under section 271FA of the Act was passed by the Director of Income-tax who is equivalent in rank with the ld. CIT(A). On carefully examining the provisions of section 253(1) of the Act, in which the order of the Assessing Officer, which has been passed with the approval of the Commissioner of Income-tax pursuant to the Dispute Resolution Panel comprising of the Commissioner of Income-tax, can only be challenged before the ITAT by filing an appeal. In the light of these facts, when the order of the Assessing Officer passed with the approval of the Commissioner of Income-tax can only be challenged before the Tribunal, then how the order of the Director of Income-tax who is equivalent in rank with the ld. CIT(A) can be challenged before the ld. CIT(A). The only forum where this order of the Director of Income-tax can be challenged is the ITAT which is higher in rank to the Director of Incometax. Thus the appeal by the assessee has been rightly filed before the Tribunal and the Tribunal is competent to adjudicate the appeal on merit. - Decided against revenue.
Issues involved:
1. Jurisdiction of the Tribunal to entertain an appeal filed against the order passed by the Director of Income-tax under section 271FA of the Income-tax Act, 1961. Detailed Analysis: The appeal was initially disposed of by the Tribunal, but the Revenue filed an M.A. stating that the Tribunal lacked jurisdiction to entertain appeals against orders under section 271FA. Relying on a previous case, it was found that such appeals should be filed before the ld. CIT(A), not the Tribunal. The Revenue argued that appeals against orders under Chapter XXI should be filed before the ld. CIT(A) as per section 246A(1)(q) of the Act. The Tribunal was urged to consider the maintainability of the appeal against the order passed under section 271FA of the Act. The assessee's counsel argued that the Director of Income-tax is equivalent in rank to the Commissioner of Income-tax (Appeals), so the appeal should be filed before a higher forum, which is the ITAT. Reference was made to section 253(1) of the Act to support this argument. The Tribunal had to determine whether the appeal against the Director of Income-tax's order under section 271FA should be filed before the ld. CIT(A) or the ITAT based on the hierarchy of authorities. The Tribunal carefully examined the relevant provisions of section 253(1) of the Act, which specify different orders against which appeals can be filed before the Tribunal. While section 253(1) did not explicitly mention orders under section 271FA, it was inferred that orders passed by officers equal in rank to Commissioners of Income-tax should be challenged before the Tribunal. The Tribunal analyzed the legislative intent behind the provisions and the hierarchy of authorities to determine the appropriate forum for appeals against such orders. Additionally, the Tribunal reviewed section 246A of the Act, which outlines orders appealable before the Commissioner (Appeals). Although most penalties under Chapter XXI are levied by officers junior to the ld. CIT(A), penalties under section 271FA are imposed by the Director of Income-tax. The Tribunal considered the concept of appellate jurisdiction, emphasizing that appeals should be filed before a higher-ranking forum. The Tribunal extensively researched appellate jurisdiction definitions from various legal dictionaries to support its decision. In conclusion, the Tribunal held that the appeal was rightly filed before the Tribunal, which had the jurisdiction to adjudicate the appeal on merit. The preliminary objection raised by the Revenue regarding the appeal's maintainability before the Tribunal was rejected. The Tribunal directed the Registry to schedule the appeal for a hearing on merit, emphasizing the importance of filing appeals before a higher-ranking forum for orders challenged.
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