2012 (1) TMI 360 - HC - Income Tax

Summary

Issues involved: Appeal u/s 260-A of Income Tax Act against ITAT's order for assessment year 2005-06.

Assessment Order under Section 144:
- The assessee, a private limited Company, filed a return for the assessment year.
- AO found discrepancies and passed an assessment order u/s 144 invoking provisions of section 145(3) and made additions on an estimate basis.

Appeal before Commissioner and CIT(A)'s Decision:
- Assessee appealed before Commissioner and submitted books of accounts.
- CIT(A) called for a remand report from AO, who found no defects in the accounts.
- CIT(A) deleted the addition as AO made no adverse comments.
- Tribunal upheld CIT(A)'s order.

Violation of Rule 46-A:
- Appellant claimed CIT(A) violated Rule 46-A of Income Tax Rules.
- CIT(A) had called for remand report from AO, who found no defects in accounts.
- CIT(A) acted within powers u/s 250(4) and did not violate Rule 46-A.

Appellate Authority's Powers:
- Appellate Commissioner's power is co-terminus with AO's power.
- Appellate authority has all powers subject to law, as per precedents cited.
- No substantial question of law in Tribunal's order.
- Appeal dismissed at admission stage.

In summary, the High Court upheld the Tribunal's decision in an appeal u/s 260-A of the Income Tax Act for the assessment year 2005-06. The AO had passed an assessment order u/s 144 due to discrepancies in the assessee's return. The CIT(A) deleted the addition after finding no defects in the accounts during scrutiny. The appellant alleged a violation of Rule 46-A, but the Court held that the CIT(A) acted within powers u/s 250(4) and did not breach the rule. The Court emphasized that the Appellate Commissioner's powers are equivalent to the AO's powers, citing relevant case law. Ultimately, the appeal was dismissed at the admission stage as no substantial question of law emerged from the Tribunal's order.