2023 (7) TMI 1206 - AT - Income Tax

Maintainability of appeal before tribunal u/s 253 against Penalty orders u/s 271FA - HELD THAT - Section 253 of the Act provides an exhaustive inventory of appeals that can be preferred before the Tribunal Sub-section (1) sets out the orders passed under the relevant sections that an assessee can challenge before the Tribunal. Similarly, sub-section (2) provides a list of sections, the orders passed where under, can be challenged by the Revenue. There is no provision u/s 253(1) entitling an assessee to file a direct appeal to the Tribunal against the penalty order passed by the AO u/s 271FA. Hence, such orders having been appealed before the Tribunal without jurisdiction, cannot be lawfully prosecuted. Similar issue came up for consideration before the Pune Tribunal in several cases including Nanded District Central Co-op. Bank Ltd. vs. Director of Income Tax (Intelligence Criminal Investigation 2022 (1) TMI 887 - ITAT PUNE Tribunal dismissed the appeal preferred by the assessee against penalty order passed by the AO u/s 271FA of the Act. Considering the judgment of Ravi Vijay Anr. 2012 (9) TMI 652 - RAJASTHAN HIGH COURT Tribunal also gave liberty to the assessee for taking recourse to the alternative remedy as suggested in the judgment, if so desired. Appeal dismissed.

Summary

Issues involved:
The judgment deals with the correctness of penalty orders passed by the Assessing Officer under section 271FA of the Income-tax Act, 1961 for the assessment years 2007-08 to 2016-17. The main issue is the jurisdiction of the Tribunal to entertain direct appeals against penalty orders under section 271FA.

Jurisdiction of Tribunal for Direct Appeals Against Penalty Orders:
The Tribunal noted a delay of 392 days in presenting the appeals but accepted the reasons provided by the assessee for the delay. Condoning the delay, the Tribunal admitted the appeals for disposal on merits. However, it was observed that there is no provision under section 253(1) of the Act entitling an assessee to file a direct appeal to the Tribunal against a penalty order passed under section 271FA. The Tribunal cited a judgment of the Hon'ble Rajasthan High Court and a decision by the Pune Tribunal to support its conclusion that such appeals cannot be lawfully prosecuted. Consequently, the Tribunal dismissed all the appeals on this ground, following the precedent set by the Pune Tribunal and the Rajasthan High Court.

Alternative Remedy for Assessee:
In line with the judgment of the Hon'ble Rajasthan High Court, the Tribunal granted the assessee the liberty to pursue an alternative remedy as suggested in the judgment, if desired. This decision was based on the principle established in the case of Director of IT vs. Ravi Vijay & Anr. by the Rajasthan High Court. The Tribunal ordered accordingly, allowing the assessee the option to explore other legal avenues for addressing the penalty orders issued under section 271FA.

Conclusion:
Ultimately, the Tribunal dismissed all the appeals due to the lack of jurisdiction for direct appeals against penalty orders under section 271FA. The decision was based on the absence of a specific provision in section 253(1) of the Act allowing such appeals, as highlighted by previous judicial decisions. The order to dismiss the appeals was pronounced in the Open Court on 27th July 2023.