The order of the Bench was delivered by
N.R.S. Ganesan, Judicial Member - The Sub Registrar, Meppayur-Kozhikode has filed the appeal against the order of the Director of Income-tax (Intelligence) dated 11-03-2013 levying penalty u/s 271FA of the Act.
2. On a query from the bench as to how the appeal is maintainable before this Tribunal against the penalty levied by the Director Income-tax (Intelligence), the ld. counsel clarified that at column 7 of the demand notice issued by the Director of Income-tax (Intelligence) it was mentioned that an appeal may be filed under Part B of Chapter XX of the Income-tax Act to the Income-tax Appellate Tribunal, Cochin Bench within 60 days of the receipt of that order in Form No.36. In view of this direction of the Director of Income-tax (Intelligence), the appeal was filed. The ld. counsel further clarified that u/s 253 of the Income-tax Act, no appeal is provided before this Tribunal against the order levying penalty u/s 271FA of the Act.
3. Shri M Anil Kumar, the ld. DR also heard. The ld. DR submitted that section 271FA was introduced in the statute book for the first time by Finance Act, 2004 with effect from 01-04-2005. However, legislature omitted to provide an appeal before the Tribunal in section 253 of the Act. Referring to section 246A of the Act, the ld. DR submitted that under clause (q), an order imposing penalty under Chapter XXI is appealable before the CIT(A). Admittedly, section 271FA falls under Chapter XXI of the Act. Therefore, unless it is otherwise provided in section 253, the appeal has to be filed only before the CIT(A) and not before this Tribunal. On a query from the bench when the CIT(A) is equivalent in rank as that of the Director of Income-tax (Intelligence) how the appeal filed under section 246A(q) of the Act would be effective, the ld. DR submitted that in the absence of consequential amendment in section 253 of the Act on introduction of section 271FA, this Tribunal cannot entertain this appeal.
4. We have considered rival submissions on either side and also perused the material available on record. The question arises for consideration is whether this Tribunal could entertain an appeal by the Sub Registrar, Meppayur-Kozhikode against the order of penalty u/s 271FA of the Act. We have carefully gone through the provisions of section 253 of the Act. Section 253 provides for an appeal before this Tribunal against the orders mentioned therein. For the purpose of clarity, the provisions of section 253 are reproduced hereunder:
"253 Appeals to the Appellate Tribunal (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order —
(a) |
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an order passed by a Deputy Commissioner (Appeals) before the 1st day of October, 1998 or, as the case may be, a Commissioner (Appeals) under section 154, section 250, section 271, section 271A or section 272A; or |
(b) |
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an order passed by an Assessing Officer under clause (c) of section 158BC, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, after the 30th day of June, 1995, but before the 1st Day of January, 1997; or |
(ba) |
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an order passed by an Assessing Officer under sub-section (1) of section 115VZC; or |
(c) |
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an order passed by a Commissioner under section 12AA or under clause (vi) of sub-section (5) of section 80G or under section 263 or under section 271 or under section 272A or an order passed by him under section 154 amending his order under section 263 or an order passed by a Chief Commissioner or a Director General or a Director under section 272A; or |
(d) |
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an order passed by an Assessing Officer under sub-section (3), of section 143 or section 147 in pursuance of the directions of the Dispute Resolution Panel or an order passed under section 154 in respect of such order." |
Nowhere in section 253 mentions the order passed by Director of Income-tax (Intelligence) or any other officer of the Income-tax Department levying penalty u/s 271FA is appealable before this Tribunal. This Tribunal being a quasi judicial authority established under the provisions of the Income-tax Act cannot travel beyond the provisions of the Act. Therefore, unless and until an appeal is specifically provided in section 253 of the Act against the order levying penalty u/s 271FA, this Tribunal is of the considered opinion that the present appeal is not maintainable before this Tribunal.
5. Now coming to the direction given by the Director of Income-tax (Intelligence) in clause 7 of the demand notice, no doubt, the Director of Income-tax (Intelligence) mentioned in the demand notice that an appeal can be filed before this Tribunal under Part B of Chapter XX of the Income-tax Act. 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. Therefore, the consent/direction of the Director of Income-tax (Intelligence) will not confer any jurisdiction on this Tribunal unless it is provided for in the Income-tax Act by the Parliament. Hence, this Tribunal could not entertain the appeal filed by the Sub Registrar, Meppayur-Kozhikode.
6. Coming to the contention of the ld. DR that appeal is provided u/s 246A(q) of the Act, no doubt, an order imposing penalty under Chapter XXI is appealable before the CIT(A) under section 246A(q) of the Act. Admittedly, section 271FA falls in Chapter XXI of the Income-tax Act. Therefore, one may claim that an appeal is provided u/s 246A(q) of the Act. We are conscious that the CIT(A) is equivalent in rank that of the Director of Income-tax (Intelligence), therefore, the appeal before CIT(A) may not be an effective and efficacious remedy available to the Sub Registrar, Meppayur-Kozhikode against whom penalty was levied. However, this Tribunal being a quasi judicial authority established under the Income-tax Act, cannot travel beyond the provisions of section 253 of the Act. Therefore, merely because the remedy available u/s 246A(q) of the Act may not be effective and efficacious that alone will not give any jurisdiction to this Tribunal to entertain this appeal.
7. Further, we are of the considered opinion that when the provisions of section 271FA was introduced in the statute book by the Finance Act, 2004 with effect from 01-04-2005 the consequential amendment to section 253 was omitted to be carried out. This omission may be unintended. One may argue that an appeal is provided against the order of penalty u/s 271 in 253(1)(a) and 253(1)(c) of the Act, therefore, all branches of section 271 i.e. from 271A to 271G are included in section. This argument may not be correct because section 271 is an independent section and it has its own sub sections. Sections 271A to 271G are not sub sections under section 271 and they are independent sections by themselves. This is obvious from section 253(1)(a) and 253(1)(c) itself. The legislature has mentioned sections 271 and 271A separately in section 253(1)(a) and 253 (1)(c) of the Act. Therefore, the legislature treated sections 271 and 271A as separate and independent sections. In other words, sections 271A to 271G are independent and separate sections and it is not part/branch of sections 271 of the Act. Therefore, argument, if any, that section 271FA is part of section 271 is not correct. This Tribunal is of the considered opinion that section 271FA is separate and independent of section 271 and therefore, the reference of section 271 in section 253(1)(a) or 253(1)(c) may not be included section 271FA. As already observed, the omission to include section 271FA in section 253 may be unintended. Therefore, 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.
8. In view of the above discussion, the appeal of the Sub Registrar, Meppayur-Kozhikode is dismissed as not maintainable before this Tribunal. However, it is made clear that it is open to the Sub Registrar, Meppayur-Kozhikode to challenge the order passed by the Director of Income-tax (Intelligence) levying penalty u/s 271FA of the Act before the appropriate forum in a manner known to law.
9. With the above observations, the appeal of the Sub Registrar, Meppayur-Kozhikode is dismissed. Consequently, the stay petition in S.A. No.50/Coch/2013 is also dismissed.
The order pronounced in the open court on 18 July, 2013.