Penalty appeal maintainability turns on exhausting the first appellate remedy before challenging a Section 271FA order directly.

An appeal against penalty under Section 271FA is not maintainable directly before the Tribunal where the statutory first appellate remedy before the Commissioner of Income-tax (Appeals) remains available. Relying on CBDT clarification, the Tribunal treated such penalty orders as falling within the appellate jurisdiction under Section 246A(1)(q), so the assessee had to exhaust that remedy before approaching the Tribunal. The direct appeals were therefore dismissed for want of maintainability.

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Issues: Whether an appeal against penalty under Section 271FA of the Income-tax Act, 1961 was maintainable directly before the Tribunal without first availing the appellate remedy before the Commissioner of Income-tax (Appeals).

Analysis: The Tribunal relied on the CBDT clarification stating that an order imposing penalty under Section 271FA falls within the appellate jurisdiction contemplated by Section 246A(1)(q) of the Income-tax Act, 1961, and that an appeal against such an order lies before the Commissioner of Income-tax (Appeals). It therefore held that the first appellate remedy had to be exhausted before invoking the Tribunal's jurisdiction directly.

Conclusion: The direct appeals before the Tribunal were not maintainable and were dismissed.

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