Appeal only after final assessment order, not draft order!

The Tribunal upheld the decision of the ld. CIT(A) declaring the appeal against the draft order as 'not maintainable' and 'defective'. It clarified that appeals lie against final orders of assessment under sections 144C(3) or 144C(13), not draft orders. The Tribunal emphasized the importance of filing appeals against final assessment orders rather than draft orders, dismissing the appeal and affirming the ld. CIT(A)'s ruling.

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Issues:
1. Maintainability of appeal against a draft order declared as 'defective' by the ld. CIT(A).

Analysis:
1. The primary issue in this case is whether the appeal against the draft order was maintainable. The assessee, a non-resident company, filed a return with Nil income but with total receipts, claiming a refund of TDS. The AO treated a portion of the receipts as chargeable to tax. The AO passed a draft order under section 144C(13) proposing a variation in income. The assessee appealed against this draft order to the ld. CIT(A), who declared it as 'not maintainable' and 'defective'. The Tribunal analyzed the sequence of events and legal provisions to determine the correctness of this decision.

2. The Tribunal examined the provisions of section 144C, which require the AO to forward a draft order to the eligible assessee if proposing a variation prejudicial to the assessee's interest. In this case, the AO passed a draft order under section 144C(13) proposing a variation in the income. The Tribunal noted that the draft order was incorrectly described as being passed under section 143(3) at the end. The AO then passed the final assessment order under section 143(3) r.w.s. 144C(3), making the addition. The Tribunal highlighted the timelines and procedures under section 144C for passing draft orders and completing assessments.

3. The core question was whether the appeal against the draft order was justifiable. The Tribunal clarified that an appeal lies against an order of assessment under section 143(3), not against a draft order. The Tribunal differentiated between draft orders under sections 144C(1), 144C(3), and 144C(13), emphasizing that only orders under 144C(3) or 144C(13) are final orders of assessment. As the appealable order before the CIT(A) is an order of assessment under section 143(3), no appeal lies against a draft order. The Tribunal upheld the ld. CIT(A)'s decision to dismiss the appeal against the draft order as 'not maintainable'.

4. The Tribunal acknowledged the confusion caused by the AO's incorrect description of the draft order and subsequent actions by the assessee. While recognizing the belated filing of an appeal against the final order under section 143(3) r.w.s. 144C(3), the Tribunal emphasized that the appeal against the draft order was legally invalid. The Tribunal concluded that only the appeal against the final order passed by the AO was effective and legally tenable for adjudication. Therefore, the ld. CIT(A)'s decision to treat the appeal against the draft order as 'defective' and 'not maintainable' was deemed appropriate.

5. In conclusion, the Tribunal dismissed the appeal, affirming the ld. CIT(A)'s decision. The order was pronounced in the Open Court on 13th October 2021.

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