The Raipur bench of the Income Tax Appellate Tribunal (ITAT) held that as per Clause (q) to sub-section (1) of Section 246A an order imposing penalty under Chapter XXI of the Act finds place in the orders which are appealable before the CIT(A).
The assessee company which is involved in the activities relating to development of mines and extraction of coal from various mines had filed its return of income for A.Y.2018-19 on 06.10.2018, disclosing a total income of Rs. 4388.10 crore (approx.). Thereafter, the assessee company revised its return of income on 30.03.2019 disclosing an income of Rs.4657.57 crore (approx.). Case of the assessee was subsequently selected for scrutiny assessment under section.143(2) of the Act.
Original assessment was framed by the A.O vide his order passed under section. 143(3) of the Act dated 02.03.2020 wherein its income was determined at Rs.6047.74 crore (approx.). The A.O while culminating the assessment initiated penalty proceedings under section. 270A of the Act. Subsequently, the A.O issued “Show Cause Notice(s)” (SCNs) dated 04.02.2020 and 07.02.2020, therein calling upon the assessee company to put forth an explanation that as to why penalty for notreporting/misreporting of income may not be imposed upon it under section. 270A of the Act.
As the explanation of the assessee did not find favour with the A.O, therefore, he vide his order passed under section. 270A dated 31.03.2020 imposed penalty of Rs. 834.10 crore under section.270A of the Act on the assessee company.
Aggrieved the assessee carried the order passed by the A.O under section.270A of the Act dated 31.03.2020 before the CIT(Appeals). The CIT(Appeals) hoing a conviction that the penalty imposed by the A.O under section. 270A did not fall within the realm of the orders which were appealable before him, thus dismissed the appeal by treating the same as infructuous. Aggrieved, the assessee appealed before the tribunal.
After hearing both the parties, the tribunal noted that the CIT(A) had on the basis of his perverse observations dismissed the appeal of the assessee company by treating the same as infructuous. As is discernible from the order of the CIT(Appeals), the appeal filed by the assessee was dismissed by him for the reason that he he a conviction that the same did not fall within the realm of the orders which were appealable before him.
The tribunal noted that, the aforesaid observation of the CIT(Appeals) is found to be perverse. As stated by the AR and, rightly so, penalty imposed under Section 270A of the Act clearly falls within the realm of orders appealable before the CIT(Appeals) under Section 246A of the Act. We, say so, for the reason that as per Clause (q) to sub-section (1) of Section 246A an order imposing penalty under Chapter XXI of the Act finds place in the orders which are appealable before the CIT(A).
The two member bench consisting of Arun Khodpia (Accountant member) and Ravish Sood (Judicial member) he that the penalty imposed by the A.O vide his order passed under section.270A of the Act dated 02.03.2020 clearly falls within the realm of the orders appealable before the CIT(Appeals) under section 246A of the Act, therefore, the dismissal of the appeal of the present assessee company by taking a view to the contrary by the CIT(Appeals) cannot be sustained. The bench, thus, in terms of aforesaid observations set-aside the order of the CIT(Appeals) and restored the matter to his file with a direction to him dispose off the appeal afresh. Thus the appeal was allowed.
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