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2018 (6) TMI 1734 - AT - Income TaxAdmission made in the assessment proceedings by authorised representative - Whether admission made by the authorised representative is not binding on the assessee is not absolute and correct proposition of law? - HELD THAT - Admission made by the authorised representative in the proceedings having expressly or implied authority binds the assessee and therefore we have no iota of doubt that the statement made by the authorised representative binds the assessee - in our view the jurist entity like the assessee before us shall always be represented either through the Director or the MD or the Company Secretary or by any other person including the authorised person through a Board Resolution. If we hold that the Act of the representative does not bind the assessee the very basis of working of the judicial system would collapse. Accordingly the judgment relied upon by the assessee is not binding - the statement made by the authorised representative who has been expressly authorised by the assessee binds the assessee. If we look into the facts of the present case the CIT (A) despite having adjudication by the AO on merit albeit reordering admission has not adjudicated the grounds on merit and has decided the appeal merely on the basis of the admission made by the authorised representative. In the fitness of present case and peculiar facts of the case we are of the opinion that the matter is required to be re-examined by the CIT (A) on merit as AO had decided the issues on merit and thereafter had recorded admission . Therefore we remand the matter back to the file of the CIT (A) for de-novo decision on all the grounds - Appeal of the assessee is allowed for statistical purposes.
Issues Involved:
1. Whether the CIT (A) erred in dismissing the appeal on the basis that the assessee's authorized representative agreed to the additions made by the AO. 2. Whether the admission by the authorized representative is binding on the assessee. 3. Whether the CIT (A) should have adjudicated the issues on merit despite the agreement by the authorized representative. Issue-wise Detailed Analysis: 1. Dismissal of Appeal by CIT (A): The CIT (A) dismissed the appeal on the ground that no appeal lies against additions agreed upon by the assessee before the AO. The assessee contended that the CIT (A) should have decided the issues on merit instead of dismissing the appeal based on the authorized representative’s agreement. The Tribunal referred to the case of R. T. Balasubramian V. ITO, where it was observed that an appeal is not barred if the assessment order was based on an agreement made by the authorized representative. 2. Binding Nature of Admission by Authorized Representative: The Tribunal noted that the admission made by the authorized representative is binding on the assessee. The authorized representative is empowered to make statements on behalf of the assessee. The Tribunal emphasized that the assessee must satisfy the appellate authority under what circumstances the admissions were made and why they should not be binding. The Tribunal referred to various judgments, including the Madras High Court in Indian Express (Madurai) P. Ltd., which highlighted that the primary purpose is to ascertain the taxpayer's liability correctly. 3. Adjudication on Merit by CIT (A): The Tribunal observed that the CIT (A) did not adjudicate the issues on merit despite the AO’s detailed findings. The Tribunal held that the CIT (A) should have examined the grounds on merit as the AO had decided the issues on merit and recorded the admission. The Tribunal remanded the matter back to the CIT (A) for a de-novo decision on all grounds, ensuring due procedure and opportunity to the assessee. Conclusion: The appeal of the assessee was allowed for statistical purposes, and the matter was remanded back to the CIT (A) for a fresh decision on merit. The Tribunal emphasized the importance of adjudicating the issues on merit and the binding nature of the authorized representative's admissions, subject to the assessee’s ability to demonstrate the circumstances under which the admissions were made.
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