TMI Blog1980 (7) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... that under the specific written power given by the appellant to the chartered accountant representative the latter was legally competent to make an agreement with the Incometax Officer so as to bind the appellant ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in their finding that the addition of Rs. 15,000 made to the appellant's income is correct and legal ? " The assessee is a private company carrying on business in chitties. In the return filed by it for the assessment year 1970-71, the assessee had claimed a deduction in respect of a sum of Rs. 44,316 on the basis that it represented expenditure laid out wholly and exclusively for the purpose of the business by way of payment of commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed to the extent of Rs. 15,000. He also gave a statement in writing to the ITO in the following terms: " Rs. 15,000 and Rs. 2,000, sitting fee, may be disallowed and no Penalty II The ITO thereafter finalised the assessment and in the assessment order he stated as follows in regard to the disallowance of the claim for deduction to the extent of Rs. 15,000. " The case was discussed with the assessee's representative and he agreed that a sum of Rs. 15,000 may be added back to the income as expenditure incurred not for the purpose of the business. Hence addition: Rs. 15,000. The assessee appealed against the aforesaid addition of Rs. 15,000, but, significantly, in the memorandum of appeal, no contention was raised that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udice, there was no justification for the assessee to withdraw from the said position or to question the legality and binding nature of the statement made on its behalf by the chartered accountant. The Tribunal was further of opinion that the statement in question was one made by the chartered accountant in the course of the assessment proceedings and incidental to that proceeding for the purpose of facilitating the finalisation thereof by the exercise of quasi-judicial powers vested in the ITO. Finally, the Tribunal found on a construction of the letter of authority given by the assessee in favour of the chartered accountant that it specifically empowered the chartered accountant to make statements and explanations on behalf of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that the return of the assessee for the assessment year in question had been prepared by the chartered accountant, to whom the letter of authority, annex. A, was issued. It is not, therefore, possible to relate the expression " statements and explanations " contained in annex. A to any obligation of the chartered accountant under r. 12(a) of the I.T. Rules, 1962-an obligation with which the assessee has little concern. Hence, it is impossible to accept the contention put forward by the assessee that the expression " statements and explanations " occurring in annex. A should be given a restricted connotation by linking it with the obligation cast on the chartered accountant under r. 12(a). In our opinion, the said expression is wide e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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