The ITAT held that in case an appellant pays fees for preferring the appeal before the ITAT which is in excess of the amounts prescribed, the Appellant was entitled to get a refund of the same. In this case, since the appeal to the ITAT was in respect of a penalty order, the fees of Rs. 500/- should have been paid in terms of section 253(6) of the Act. Since the Appellant-assessee had paid Rs. 10,000/-, the AO was directed to refund this amount either by way of adjusting the same against the outstanding demand, if any, or by way of grant of refund within a reasonable period.

In this matter, the penalty imposed on the Appellant-assessee under section 271(1)(c) was also deleted.