M/S. MALNAD ARECA MARKETING CO-OPERATIVE SOCIETY LIMITED,SHIVAMOGGA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, SHIVAMOGGA

As per its grounds of appeal, the assessee has assailed the order of the AO giving the appeal effect arose in pursuance of the appellate order rendered by the Tribunal on the question of applicability of sec.80P(2)(a)(i) of the Act on interest earned by the assessee Society.

Without going into the merits of the case, we notice at the outset that the assessee has challenged the act of the AO before the Tribunal towards order giving appeal effect wherein deduction under sc.80P has been denied to the assessee.

In this regard, we find that the assessee has approached the Tribunal incorrectly instead of the first appellate authority.

The order giving appeal effect is an appealable order under sec.246A of the Act because the order passed by the AO giving effect to the decision of the appellate authority is as much an assessment order as the one passed by him under sec.143 of the Act. We thus find that the appeal effect order passed by the AO allegedly in contravention of the appellate order of the ITAT is an appealable order before the CIT(A) under sec.246A of the Act. Consequently, exercise of statutory right by assessee to prefer appeal directly before Tribunal without placing its grievance before the CIT(A) is not maintainable under the scheme of the Act. Consequently, the appeal of the asessee arising from the order of AO cannot be entertained.

However, we may hastened to add that the assessee shall be entitled to pursue the remedy by way of appeal against the order of the AO giving effect to the appeal in question before the CIT(A) in accordance with law. The CIT(A) shall not reject the appeal of the assessee on the grounds of bar of limitation as attributable to the error in pursuing the remedy wrongly before the Tribunal instead of CIT(A). (B)/2019 3 7. In the result, the appeal of the assessee is dismissed as infructuous.