Assessment

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PARIN SHAH (Querist)
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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)?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 April 2010 The power os CIT(A) are as follows:

Powers of the Commissioner (Appeals).

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.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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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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