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2022 (3) TMI 1394 - AT - Income TaxPenalty u/s. 271FA - non-compliance of provisions of Section 285BA(1) - HELD THAT:- The said penalty order was challenged by assessee by filing first appeal before CIT(A), who dismissed the appeal of the assessee on the grounds that the appeal against penalty order passed u/s 271FA for infringement of Section 285BA(1) of the 1961 Act, is not subject to challenge before ld. CIT(A) keeping in view provisions of Section 246 and 246A of the 1961 Act, and hence the appeal was dismissed by ld. CIT(A) as infructuous being not maintainable with ld. CIT(A) and directions were issued to the assessee to file its appeal with appropriate authority designated for adjudicating such appeals. We are afraid that this finding of ld. CIT(A) is erroneous in the teeth of provisions of Section 246A(1)(q) of the 1961 Act, and infact ld. CIT(A) is the appropriate authority designated for adjudicating first appeal against an penalty order passed by AO u/s 271FA of the 1961 Act. The provisions of Section 246A(1)(q) of 1961 Act is a residuary provisions which stipulate that first appeal against an order imposing penalty under Chapter XXI shall lie with CIT(A). Undoubtedly, provisions of Section 271FA falls under Chapter XXI of the 1961 Act. We are setting aside appellate order passed by CIT(A) as not sustainable in the eyes of the law and restore the matter back to the file of ld. CIT(A) for fresh adjudication of all the grievances/grounds of appeal raised by the assessee in its appeal before ld. CIT(A), by holding that CIT(A) is the correct designated appellate authority to adjudicate first appeal arising from an penalty order passed by AO u/s 271FA.
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