Chapter XXI penalty appeals must first go to the Commissioner of Income Tax (Appeals), not directly to the Tribunal.

A direct appeal against a penalty order under section 271FA of the Income-tax Act is not maintainable before the ITAT because such penalty falls within Chapter XXI, and section 246A(1)(q) provides that the first appeal against a Chapter XXI penalty order lies to the Commissioner of Income Tax (Appeals). The statutory appellate scheme therefore requires the assessee to approach the appellate commissioner first, rather than filing directly before the Tribunal.

---

---

Issues: Whether a direct appeal against a penalty order imposed under section 271FA of the Income-tax Act, 1961 lies before the Income Tax Appellate Tribunal or before the Commissioner of Income Tax (Appeals).

Analysis: Penalty under section 271FA falls within Chapter XXI of the Income-tax Act, 1961. Section 246A(1)(q) provides that an appeal against an order imposing penalty under Chapter XXI lies to the Commissioner of Income Tax (Appeals). The direct filing of the appeal before the Tribunal was therefore contrary to the statutory appellate scheme and the appeal was not maintainable before the Tribunal.

Conclusion: The direct appeal before the Tribunal was held to be not maintainable and the proper forum for the first appeal was the Commissioner of Income Tax (Appeals).

---