1982 (9) TMI 102 - AT - Income Tax

Summary

Issues:
1. Validity of additions made by the ITO based on agreement with the assessee's representative.
2. Validity of ex parte order by the AAC due to alleged lack of notice of hearing served on the assessee.

Detailed Analysis:

1. The judgment revolves around the validity of additions made by the Income Tax Officer (ITO) based on an agreement with the assessee's representative. The assessee, an individual, earned income from various sources during the relevant assessment year. The ITO made additions to the declared income, which were agreed upon by the assessee's representative, Shri Murthy. The Appellate Tribunal considered the contention that the representative acted beyond his authority, stating that since the representative was authorized by the assessee and the additions were made based on his agreement with the ITO, they were considered as agreed additions. The Tribunal found no evidence to suggest that the representative acted against the assessee's instructions, leading to the conclusion that the additions were validly agreed upon, and thus upheld.

2. The second issue pertains to the ex parte order by the Additional Commissioner of Income Tax (AAC) due to an alleged lack of notice of hearing served on the assessee. The Tribunal examined the timeline of the notice issuance and delivery. The notice of hearing was issued on 17th February, 1981, with the hearing scheduled for 27th February, 1981. The notice was served on the assessee on 10th March, 1981, after the scheduled hearing date. The assessee argued that the delayed service rendered the ex parte order invalid. However, the Tribunal applied legal presumptions regarding postal service timelines and found that the notice was properly addressed and posted in a timely manner. As the presumptions were not rebutted by the assessee with evidence, the Tribunal concluded that the notice was effectively served. Consequently, the ex parte order by the AAC was deemed justified, and the agreed additions were upheld.

In a separate note, another Judicial Member concurred with the decision and clarified that the Tribunal's ruling was based solely on the confession made before the ITO by the assessee's representative. It was emphasized that the decision did not set a precedent for future cases and that the assessee could challenge similar additions in subsequent years by providing evidence to the ITO.

In conclusion, the Tribunal dismissed the assessee's appeal, confirming the validity of the agreed additions and upholding the ex parte order by the AAC based on the deemed service of the notice of hearing.