2014 (1) TMI 102 - AT - Income Tax

Appeal is provided before this Tribunal against the order levying penalty u/s 271FA - Penalty for failure to furnish annual information return (AIR) - Held that - It is well settled principles of law that consent of a litigant party will not confer any jurisdiction on a judicial or quasi judicial authority unless and until it is otherwise conferred by the legislature - The consent/direction of the Director of Income-tax (Intelligence) will not confer any jurisdiction on the Tribunal unless it is provided for in the Income-tax Act by the Parliament - Unless and until an appeal is specifically provided in section 253 of the Act against the order levying penalty u/s 271FA, the present appeal is not maintainable before the Tribunal - The provisions of section 271FA was introduced in the statute by the Finance Act, 2004 with effect from 01-04-2005 the consequential amendment to section 253 was omitted to be carried out - The omission to include section 271FA in section 253 may be unintended - It is open to the department to bring to the notice of the concerned authority about the omission to provide appeal before the Tribunal for making consequential amendment to section 253 of the Act in case the department found that the omission is unintended - Decided against assessee.

Summary

Issues:
Appeal maintainability against penalty u/s 271FA before ITAT Cochin.

Analysis:
The appeal was filed by the Sub Registrar against the penalty imposed under section 271FA of the Income-tax Act. The appellant argued that the appeal was maintainable before the Income-tax Appellate Tribunal, Cochin Bench based on the direction in the demand notice issued by the Director of Income-tax (Intelligence). However, the Departmental Representative contended that section 271FA did not provide for an appeal before the Tribunal under section 253 of the Act. The Tribunal analyzed section 253, which lists specific orders appealable before it, and found that the order levying penalty u/s 271FA was not included. As a quasi-judicial authority, the Tribunal could not exceed the statutory provisions. Therefore, the appeal was deemed not maintainable before the Tribunal.

The Tribunal also addressed the argument that an appeal could be filed under section 246A(q) of the Act, which allows appeals against penalties under Chapter XXI, where section 271FA falls. While acknowledging the CIT(A) as an equivalent authority to the Director of Income-tax (Intelligence), the Tribunal emphasized that its jurisdiction was limited by the provisions of section 253. The Tribunal noted the omission of a consequential amendment to section 253 when section 271FA was introduced in 2005. It clarified that sections 271 and 271A to 271G were distinct sections, and section 271FA was separate and independent. The Tribunal suggested that the department could address the unintended omission to provide an appeal mechanism for section 271FA.

Ultimately, the Tribunal dismissed the appeal of the Sub Registrar, Meppayur-Kozhikode as not maintainable before it. However, it allowed the Sub Registrar to challenge the penalty order before the appropriate forum following legal procedures. The stay petition related to the appeal was also dismissed. The judgment was pronounced on 18th July 2013.