TaxTMI 
TaxTMI 
2026 (10) TMI 341
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....he Act) vide order dated 03.12.2025. 2. In the memo of appeal, the assessee has raised as many as XIII grounds of appeal. However, Ground No. VII challenges the validity of the assessment order on the ground that the AO failed to pass a draft assessment order as mandated u/s 144C(1) of the Act. Since this ground goes to the root of the validity of the assessment order itself, we consider it appropriate to adjudicate the same first. 3. The relevant facts are that the assessee is an individual and a chartered accountant by profession and a Non-Resident under the provisions of the Act. For the captioned AY, the assessee filed her return of income declaring income of Rs. 29,48,650/- only. Subsequently, the assessment was reopened under se....
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....iation prejudicial to the interest of the assessee, he was mandatorily required to first forward a draft assessment order u/s 144C(1) of the Act. However, no such draft assessment order was passed and the AO directly passed the final assessment order dated 16.03.2022. 4.1 The Ld. AR further submitted that the procedure prescribed u/s 144C of the Act is mandatory and failure to pass a draft assessment order deprives an eligible assessee of the statutory right to approach the Ld. DRP. It was therefore submitted that the defect goes to the root of the assessment and cannot be treated as a mere procedural irregularity. In support of his contention, the Ld. AR relied, inter alia, on the decisions in Zuari Cement Ltd. v. ACIT, International Ai....
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....dated 16.03.2022, making a variation prejudicial to the interest of the assessee without first forwarding a draft assessment order u/s 144C(1) of the Act. Therefore, the controversy before us is confined to whether the assessee falls within the definition of an "eligible assessee". 6.2 In this regard, we note that clause (b) of sub-section (15) of s.144C of the Act was amended by the Finance Act, 2020 w.e.f. 01.04.2020. After the said amendment, the expression "eligible assessee" includes, apart from the person referred to in clause (a), a non-resident not being a company, or a foreign company. Thus, after the amendment, a non-resident individual is specifically brought within the ambit of an eligible assessee for the purpose of section ....
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....essee was deprived of the statutory remedy available before the Ld. DRP. In our considered view, such failure cannot be regarded as a mere procedural irregularity since it goes to the very validity of the final assessment order. 6.6 In this regard, the assessee has relied upon the decision in Zuari Cement Ltd. v. ACIT, wherein the failure to pass a draft assessment order as required u/s 144C(1) of the Act was held to render the final assessment order without jurisdiction. The assessee has also relied upon the decision of the Hon'ble Bombay High Court in International Air Transport Association v. DCIT [2016] 68 taxmann.com 246 (Bom.), wherein it was held that passing of a draft assessment order u/s 144C(1) of the Act is mandatory in t....