TMI Blog1994 (1) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer. The Assessing Officer observed that the purchases of kappas were properly supported by invoices and bills were made for sales, that the drawings of the assessee were poor when compared to the size of this family that some of the commission payments for purchases and sales effected were not capable of verification and that travelling expenses were on the high side in view of the fact that purchases and sales were made locally. In view of the above deficiencies, he made estimated additions in the following manner to cover the aforementioned defects :--- Asst. year Addition made Rs. 1985-86 23,000 1986-87 22,000 1987-88 24,000 1988-89 25,000 Aggrieved by the said additions, the assessee preferred appeals before the DC (Appeals). 3. In the grounds of appeal filed before the DC (Appeals) it was contended that the Assessing Officer erred in stating that the assessee was doing business locally, that the assessee approached Andhra and Karnataka merchants to effect purchases and sales, that cotton business was mainly based on commission payments when effecting purchases and sales and that travelling expenses were not high when compared to the turnover of the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing proper explanations on his behalf, that the additions accepted by the representative were in detriment of his interests and, therefore, could not be sustained. It was accordingly urged that he was an aggrieved assessee and entitled to appeal under section 246. It was further urged that the representative has acted not in accordance with the intention of the assessee in the appeals. It was accordingly prayed that the order of the DC (Appeals) maybe cancelled and justice rendered. 5. The assessee's counsel filed a written representation running to 15 pages which were to the following effect : The question that arises for consideration of the Tribunal in these appeals in whether, as held by the DC (Appeals), the actions of the authorised representative of the assessee were binding on the assessee. It is not disputed that Shri V. Ramachandran, ITP, was duly authorised by the assessee to appear before the Assessing Officer on behalf of the assessee. The authorisation on record contains the words "whatever explanations or statements he gives or makes on my behalf will be binding on me". Evidently the DC (Appeals) had borne in mind these words while holding that the authorised repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and explanations" in the authorisation in favour of the assessee's representative was wide enough to take in all statements and explanations relating to the matters that were germane to the assessment proceedings for the relevant year, which would include the claim for deduction put forward by the assessee. Herewith submitted six standard forms of Vakalatnama used in the (1) Supreme Court of India, (2) Madras High Court, (3) City Civil Court of Madras, (4) Delhi Courts, (5) Karnataka Courts, and (6) Andhra Pradesh Courts. While Vakalatnamas in 1 to 3 do not make any reference "to compromise", there is an express authorisation in the other three Vakalatnamas "to compromise". In the absence of an express authority as found in the Delhi, Karnataka and Andhra Pradesh Vakalatnamas, the Advocate will not be competent to enter into a compromise or make any concession on behalf of his client so as to bind the client. Reference may kindly be made to Rule 3 of Order XXIII of the Code of Civil Procedure, 1908. In the said rule relating to "compromise of suit" the words "in writing and signed by the parties" have been inserted by the Code of Civil Procedure (Amendment) Act, 1976 with effect f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a legal grievance by wrongfully depriving him of something. In the Income-tax proceedings before the Assessing Officer the assessee can appear directly in person or through an authorised representative as laid down in section 288 of the IT Act, 1961. Before the Assessing Officer the assessee Shri R.T. Balasubramaniam has duly authorised Shri V. Ramachandran, B. Com., Auditor, Tirupur, to represent his case for all the assessment years under consideration. Copies of authorisations issued by the assessee in favour of Shri V. Ramachandran are given at pages 1, 3, 5 7 of the paper-book filed by the Department. The authorisation include the words "whatever explanations or statements he gives or makes on my behalf will be binding on me". Kind attention is invited to the judgment of the Madras High Court in the case of Ramanlal Kamdar v. CIT [1977] 108 ITR 73. The High Court in the said case held as under : "Once the assessee had stated that it had no objection to the proposed revision and the Income-tax Officer had also revised the original assessment as proposed by him, the assessee could not be said to have been aggrieved by the order of the Income-tax Officer. Only if the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned. It may be stated here that tax appeals are not similar to civil appeals. In tax appeals, proceedings are not adversary proceedings. The judgment of the Madras High Court in the case of CIT v. Indian Express (Madurai) (P.) Ltd. [1983] 140 ITR 705 may kindly be seen. A tax appeal is quite different from a civil appeal. The judgment of the Madras High Court in the case of State of Tamil Nadu v. Arulmurugan Co. [1982] 51 STC 381 (FB) may also be seen. Summary of the said judgments can be seen at pages 5150 and 5151 of Chaturvedi Pithisaria's "Income-tax Law", Fourth Edition, Volume 5. Therefore, the reliance by the assessee's counsel on the Civil Procedure Code and the forms of Vakalatnamas filed before the Courts are of no application to the income-tax proceedings. In view of the provisions of section 288 of the IT Act, 1961, the authorised representative of the assessee is fully empowered to bind the assessee. The assessee cannot be considered as an aggrieved party to file appeals against the orders of assessment. In the circumstances the present appeals should be dismissed as incompetent. 7. The assessee's counsel filed a written reply to the following effect : In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted fact is that the assessee's authorised representative, Shri V. Ramachandran had signed in the order-sheets for the assessment years now under consideration in token of his having agreed for the additions proposed by the Assessing Officer. In this context the question that comes up for consideration is whether this agreement by the assessee's authorised representative before the Assessing Officer for making the additions would debar the assessee from preferring an appeal to the appellate authority. In the decision of the Madras High Court in the case of Ramanlal Kamdar their Lordships inter alia observed as under :--- "...Once the assessee had stated that it had no objection to the proposed revision and the Income-tax Officer had also revised the original assessment as proposed by him, the assessee could not be said to have been aggrieved by the order of the Income-tax Officer. Only if the assessee was aggrieved by the order of the income-tax Officer, he had the right to file an appeal before the Appellate Assistant Commissioner and once the assessee could not have had any grievance in view of the statement made by the partner, the appeal to the Appellate Assistant Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the Assessing Officer on the basis of the agreement made by the authorised representative and consequently he cannot be denied the right of vindicating his grievance before a higher forum. Apart from the above, the Punjab Haryana High Court in the case of Chhat Mull Aggarwal v. CIT [1979] 116 ITR 694 has inter alia laid down that there is no provision in the IT Act whereby the remedy of appeal against the order of the AAC is barred if the impugned orders mention that they had been passed on the admission of the assessee. In the case of Indian Express (Madurai) P. Ltd. the Madras High Court while considering the scope of the appellate powers and jurisdiction of the Tribunal, has inter alia observed :--- "...The primary purpose of the statute is to levy and collect the income-tax. This is based on the cardinal principle, which has been incorporated as a veritable constitutional provision, that no tax can be levied or collected save under authority of law. The task of an appellate authority under the taxing statute, especially a non-departmental authority like the Tribunal, is to address its mind to the factual and legal basis of an assessment for the purpose of properly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e like...." 9. From the aforementioned facts, it is clear that there is no lis in the strict sense of the term as such between the assessee and the Revenue under the various provisions relating to the second appeal, reference, etc. It is also seen that the parties in appeal proceedings are not parties to adversary proceedings. On the other hand, the main object of the administration and management of income-tax is to ascertain the tax payer's liability correctly. In the instant case, as already stated, the assessee's authorised representative had admitted before the Assessing Officer that the subject additions may be made to the total income of the assessee. His agreement for the impugned additions is based upon misapprehension of facts and mistaken belief. Consequently the assessments were made by the Assessing Officer on the basis of such agreement made by the authorised representative of the assessee. It cannot therefore, be said that the assessee was not aggrieved by the orders of the Assessing Officer. Therefore, I am of the considered view that an appeal lies to the appellate forum from the orders of the assessment so made especially keeping in view the Madras High Court's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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