2022 (1) TMI 887 - AT - Income Tax

Penalty u/s. 271FA - Maintainability of assessee appeal against penalty levy before the Tribunal - assessee did not file the Statement of Financial Transactions (SFT) u/s. 285BA in respect of the Specified Transactions - HELD THAT - Section 253 of the Act contains a list of the orders appealable before the Tribunal. Sub-section (1) provides for the filing of appeals by the assessee against the orders passed under the specified sections; and sub-section (2) contains a list of the orders appealable by the Revenue. Section 253(1) does not contain an order passed u/s. 271FA. This very issue came up for consideration before the Hon'ble Rajasthan High Court in Sub-Registrar, Suratgarh, District Sri Ganganagar 2013 (2) TMI 911 - RAJASTHAN HIGH COURT as approved the view taken by the Tribunal in dismissing the appeal against the order passed u/s. 271FA, as not maintainable - As further observed that the assessee has an alternative remedy by way of appeal against the impugned penalty order before the ld. first appellate authority, i.e. CIT(A) and allowed an opportunity to the assessee to file appeal against the order u/s. 271FA before the CIT(A). Similar view has been taken in DIT vs. Ravi Vijay Anr. 2012 (9) TMI 652 - RAJASTHAN HIGH COURT . No contrary view by any other High Court has been brought to our notice. Respectfully following the judgments of the Hon'ble Rajasthan High Court on this score, we dismiss the appeal of the assessee as not maintainable.

Summary

Issues:
1. Imposition of penalty u/s. 271FA of the Income-tax Act, 1961 for non-filing of Statement of Financial Transactions (SFT) by a Cooperative Bank.
2. Maintainability of appeal before the Tribunal against the penalty order u/s. 271FA.

Issue 1: Imposition of Penalty u/s. 271FA:
The appeal before the Appellate Tribunal ITAT PUNE concerned the imposition of a penalty of ?1,32,800 u/s. 271FA of the Income-tax Act, 1961 on a Cooperative Bank for failing to file a Statement of Financial Transactions (SFT) in Form No. 61A in relation to "Specified Transactions" for the Assessment Year 2017-18. The penalty was calculated at ?100 per day from 01-07-2017 to 30-11-2017 and ?500 per day from 01-12-2017 to 23-07-2018. The assessee challenged this penalty order before the Tribunal, leading to a detailed legal analysis.

Issue 2: Maintainability of Appeal:
The crux of the legal debate revolved around the maintainability of the appeal before the Tribunal against the penalty order u/s. 271FA. Section 253 of the Income-tax Act lists orders appealable before the Tribunal, but notably, it does not explicitly include orders passed u/s. 271FA. The Tribunal examined precedents, including the Kolkata Bench's decision in Malda District Central Co-op Bank Ltd. Vs. DIT and orders from Pune Benches, which held that appeals against orders u/s. 271FA were not maintainable. The Tribunal noted that the Hon'ble Rajasthan High Court in Sub-Registrar, Suratgarh, District Sri Ganganagar Vs. DIT had endorsed the view that such appeals were not maintainable. The High Court highlighted the alternative remedy available to the assessee through an appeal before the CIT(A). Citing this legal precedent, the Tribunal dismissed the appeal, affirming the non-maintainability of the appeal u/s. 271FA.

In conclusion, the Appellate Tribunal upheld the penalty imposed u/s. 271FA on the Cooperative Bank for non-filing of SFT. However, the Tribunal ruled that the appeal against this penalty was not maintainable before them based on legal precedents and the absence of specific inclusion in the appealable orders under Section 253. The Tribunal directed the assessee to pursue the alternative remedy of appealing before the CIT(A) as suggested by the Hon'ble Rajasthan High Court. The judgment serves as a significant legal interpretation regarding the maintainability of appeals against penalties imposed u/s. 271FA under the Income-tax Act, providing clarity on the available legal avenues for aggrieved parties in such cases.