First appeal against Chapter XXI penalty lies before Commissioner (Appeals); dismissal as not maintainable was set aside and remanded.

Penalty imposed under section 271FA for default in complying with section 285BA(1) falls within Chapter XXI of the Income-tax Act, so the first appeal lies to the Commissioner (Appeals) under section 246A(1)(q), which operates as the residuary appellate provision for penalty orders under that Chapter. The view that such an appeal was not maintainable was erroneous. The dismissal of the appeal as infructuous was set aside, and the matter was remanded for fresh adjudication by the Commissioner (Appeals) after affording due opportunity of hearing.

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Issues: Whether an appeal against a penalty order under section 271FA of the Income-tax Act, 1961 lies before the Commissioner (Appeals) under section 246A(1)(q) and whether the first appellate order dismissing the appeal as not maintainable was sustainable.

Analysis: Penalty under section 271FA for default in complying with section 285BA(1) falls within Chapter XXI of the Income-tax Act, 1961. Section 246A(1)(q) is the residuary appellate provision for orders imposing penalty under Chapter XXI and therefore provides the statutory forum of first appeal before the Commissioner (Appeals). The view that the appeal was not maintainable before that authority was held to be erroneous, and the matter was required to be examined on merits by the proper appellate forum after giving due opportunity of hearing.

Conclusion: The Commissioner (Appeals) was held to be the correct appellate authority, the dismissal of the appeal as infructuous was set aside, and the matter was remanded for fresh adjudication before the Commissioner (Appeals).

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