Appeal Against Section 143(1) Order Is Maintainable; Doctrine of Merger Not Applicable, Appeal Dismissed

The ITAT Chennai upheld the CIT(A)'s dismissal of the assessee's appeal, ruling that the appeal against the order under section 143(1) was maintainable and that the doctrine of merger did not apply. The Tribunal found that the assessee was not aggrieved by the order under section 143(3), which contained no additions, and therefore the CIT(A) correctly declined to adjudicate on grounds unrelated to the 143(3) order. The Tribunal confirmed that the assessee should have contested the 143(1) order passed by the CPC, and since no error was found in the CIT(A)'s order, the appeal was dismissed in its entirety.

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ISSUES:

Whether the doctrine of merger applies to merge the order under section 143(1) with the assessment order under section 143(3) for the purpose of appeal adjudication.Whether an assessee aggrieved by an order under section 143(1) can file an appeal against the assessment order under section 143(3) when no additions are made therein.Whether the first appellate authority erred in dismissing the appeal on the ground that the appeal did not emanate from the order under section 143(3).Whether the assessee's appeal is maintainable when the grievance arises from the order under section 143(1) passed by the Central Processing Centre (CPC).

RULINGS / HOLDINGS:

The doctrine of merger does not apply to merge the order under section 143(1) with the assessment order under section 143(3) in this case, as the statutory provisions under section 246(1)(a) provide separate appeal rights against orders under both sections.An assessee aggrieved by the order under section 143(1) is entitled to file an appeal against that order and cannot seek to challenge it by appealing solely against the order under section 143(3) when no additions or grievances arise from the latter.The first appellate authority correctly dismissed the appeal as the grounds raised did not emanate from the order under section 143(3), and the assessee was not aggrieved by that order.The appeal filed against the order under section 143(3) is not maintainable when the grievance and demand arise from the order under section 143(1), which the assessee failed to contest.

RATIONALE:

The court applied the statutory framework of section 246(1)(a) of the Income Tax Act, which explicitly includes orders under section 143(1) as appealable orders before the Commissioner of Income Tax (Appeals).The court emphasized that the assessee's grievance arose from the order under section 143(1) dated 09.11.2020 passed by the CPC, which made additions and created demand, and not from the subsequent order under section 143(3) where no additions were made.The court rejected the invocation of the doctrine of merger, holding that separate statutory appeal rights exist for orders under sections 143(1) and 143(3), and these cannot be merged to circumvent procedural requirements.The first appellate authority's dismissal was upheld as there was no error in law or fact in rejecting the appeal on non-maintainability grounds, since the appeal did not emanate from the order under section 143(3).

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