13 April 2010
in one case ito disallowed some expenses aggrived by the order the assessee files appeal to CIT(A). The CIT(A) has disallowed the payment made u/s 40A(2b) and impose a penalty u/s 271(1)(c). But the CIT(A) has no power to make addition. so my question is to whether change of opinion by i.t.authority is liable for penalty u/s 271(1)(c)?
251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers—
(a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment;
(b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty;
(c) in any other case, he may pass such orders in the appeal as he thinks fit.
(2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction.
Explanation.—In disposing of an appeal, the [Commissioner (Appeals)] may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the [Commissioner (Appeals)] by the appellant.
So the CIT(A) can increase the assessment and as well levy penalty.
13 April 2010
The powers of CIT (Appeals) is co-terminus with that of the assessing officer. In view of that, and what is explianed by Adita ji, the appellate authorities action is justifiable.
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