M/s. Loni Enterprises, Vijayapura V. Income Tax Officer, Ward-1, Vijayapura

ITA 2787/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4808 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 20-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JHA CIT HEARD ON PRONOUNCE
• Assessee Lawyers: V K GURUNATHAN
• Keywords: Business expenditure; Right to appeal

Judgement Text

ITA.2787/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.2787/BANG/2017 (ASSESSMENT YEAR : 2014-15) M/S.LONI ENTERPRISES, LION BUILDING, S. S. FRONT ROAD, GANDHI CHAWK, VIJAYAPURA .. APPELLANT PAN : AAAFL5259L V. INCOME-TAX OFFICER (TDS), WARD 1, VIJAYAPURA .. RESPONDENT ASSESSEE BY : SHRI. V. K. GURUNATHAN, ADVOCATE REVENUE BY : SHRI. D. K. JHA, ADDL. CIT HEARD ON : 24.05.2018 PRONOUNCED ON : 05.06.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE CIT (A), GULBARGA, DT.19.10.2017, FOR THE ASSES SMENT YEAR 2014- 15, ON THE FOLLOWING EFFECTIVE GROUNDS : ITA.2787/BANG/2017 PAGE - 2 02. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AR T HAT THE CIT (A) IN HIS ORDER HAS NOT ADJUDICATED THE ISSUES ON MERI T AND HAS SIMPLY DISMISSED THE APPEAL OF THE ASSESSEE HOLDING THAT N O APPEAL LIES AGAINST THE ADDITION WHICH WERE AGREED BY THE ASSES SEE BEFORE THE AO. IT WAS SUBMITTED BY THE LD. AR THAT THE AO HAS DEALT WITH THE ISSUES RAISED BY THE ASSESSEE IN DETAIL AND THEREFO RE IT IS INCUMBENT UPON THE CIT(A) TO DECIDE THE ISSUES ON MERIT INSTE AD OF REFUSING TO ENTERTAINING THE APPEAL BASED ON THE AUTHORISED REP RESENTATIVES AGREEMENT. FOR THIS, THE LD. AR RELIES UPON THE DE CISION OF THE SMC BENCH OF THE TRIBUNAL IN THE MATTER OF R. T. BA LASUBRAMIAN V. ITO [1994) 50 ITD 513]. OUR ATTENTION WAS DRAWN TO PARAS 8 AND 9 OF THE ORDER, TO THE FOLLOWING EFFECT : ITA.2787/BANG/2017 PAGE - 3 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE PAPERS FILED BEFORE ME. THE DY. COMMISSIONER (APPEA LS) NOTICED THAT THE ASSESSEES AUTHORISED REPRESENTATIVE, SHRI V. RAMACHANDRAN, B. COM., AUDITOR, TIRUPUR HAD AGREED FOR ADDITIONS FOR ALL THE FOUR ASSESSMENT YEARS UNDER C ONSIDERATION ON BEHALF OF THE ASSESSEE AND THAT HE HAD ALSO SIGN ED IN THE ORDER SHEETS OF THE RELEVANT ASSESSMENT YEARS FOR HAVING AGREED FOR THE ADDITIONS PROPOSED BY THE ASSESSING OFFICER. HE OBS ERVED THAT AS PER SECTION 246(1) ANY ASSESSEE AGGRIEVED BY THE OR DER OF THE ASSESSING OFFICER MAY APPEAL TO THE FIRST APPELLATE AUTHORITY. IN THAT VIEW OF THE MATTER, HE HELD THAT IT COULD NOT BE SAID THAT THE ASSESSEE WAS AGGRIEVED IN THIS CASE AS THE ADDITION S MADE BY THE ITO WERE MADE AS AGREED TO BY THE AUTHORISED REPRES ENTATIVE OF THE ASSESSEE. IN THE CIRCUMSTANCES, HE DISMISSED TH E APPEALS FILED BY THE ASSESSEE. THE DEPARTMENTAL REPRESENTATIVE FI LED A PAPER- BOOK CONTAINING PHOTOSTAT COPIES OF THE AUTHORISATI ONS ISSUED BY THE ASSESSEE IN FAVOUR OF SHRI V. RAMACHANDRAN, AUT HORISED REPRESENTATIVE AND ALSO THE ORDER-SHEET ENTRIES FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. THE ADMITTED FACT IS THA T THE ASSESSEES AUTHORISED REPRESENTATIVE, SHRI V. RAMAC HANDRAN 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 AGR EEMENT BY THE ASSESSEES AUTHORISED REPRESENTATIVE BEFORE THE ASS ESSING OFFICER FOR MAKING THE ADDITIONS WOULD DEBAR THE ASSESSEE F ROM PREFERRING AN APPEAL TO THE APPELLATE AUTHORITY. IN THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF RAMANLAL KAMDA R (SUPRA) THEIR LORDSHIPS INTER ALIA OBSERVED AS UNDER : '... ONCE THE ASSESSEE HAD STATED THAT IT HAD NO OB JECTION TO THE PROPOSED REVISION AND THE INCOME-TAX OFFICER HAD AL SO REVISED THE ORIGINAL ASSESSMENT AS PROPOSED BY HIM, THE ASS ESSEE 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 A SSESSEE COULD NOT HAVE HAD ANY GRIEVANCE IN VIEW OF THE STA TEMENT MADE BY THE PARTNER. THE APPEAL TO THE APPELLATE ASSISTA NT COMMISSIONER WAS INCOMPETENT AND EQUALLY THE APPEAL TO THE. TRIBUNAL WAS INCOMPETENT...' ITA.2787/BANG/2017 PAGE - 4 FROM THE AFOREMENTIONED DECISION IT MAY BE SEEN THA T THE ASSESSEE WOULD NOT NORMALLY HAVE ANY GRIEVANCE AGAI NST AN ASSESSMENT ORDER IF THE SAME WAS MADE ON THE BASIS OF AN AGREEMENT MADE BY HIMSELF IN THE INSTANT CASE THE A GREEMENT WITH REGARD TO THE ADDITIONS WAS NOT MADE BY THE AS SESSEE HIMSELF BUT BY HIS AUTHORISED REPRESENTATIVE. AS SU CH, IT CANNOT BE SAID THAT NO APPEAL LIES AGAINST THE ORDER OF AS SESSMENT MADE BY THE ASSESSING OFFICER ON THE BASIS OF AN AGREEME NT MADE BY THE ASSESSEES AUTHORISED REPRESENTATIVE, EVEN IF S UCH AN ASSESSMENT ORDER HAD CAUSED GRIEVANCE TO THE ASSESS EE. IN THE CASE OF JAYASREE CHIT FUNDS & SERVICES (P.) LTD. (SUPRA) THE KERALA HIGH COURT HAS INTER ALIA LAID DOWN THAT IF THE ASSESSEES AUTHORISED REPRESENTATIVE AGREES TO DISA LLOWANCE OF A CLAIM FOR DEDUCTION AS A BUSINESS EXPENDITURE, AND IF SUCH A REPRESENTATION WAS MADE VOLUNTARILY AND NOT MADE ON ANY MISAPPREHENSION OF FACTS OR MISTAKEN BELIEF, THEN T HE STATEMENT MADE BY THE REPRESENTATIVE WAS IN THE COURSE OF AND INCIDENTAL TO ASSESSMENT PROCEEDINGS. FROM THE AFOREMENTIONED OBSERVATION OF THE KERALA. HIGH COURT, IT MAY BE SEEN THAT NORMALLY IF THE ASSESSEES REPR ESENTATIVE AGREES TO DISALLOWANCE OF A CLAIM VOLUNTARILY, THEN IT SHOULD NOT BE OPEN TO THE ASSESSEE TO RETRACT FROM SUCH AN AGR EEMENT. HOWEVER, IT MAY BE SEEN THAT IF THE ASSESSEES AUTH ORISED REPRESENTATIVE AGREES TO DISALLOWANCE OF A CLAIM FO R DEDUCTION AS BUSINESS EXPENDITURE ON ANY MISAPPREHENSION OF FACT S OR MISTAKEN BELIEF, THEN THE SAME WOULD NOT BAR THE AS SESSEE FROM VINDICATING HIS GRIEVANCE BY PREFERRING AN APPEAL. THE BOMBAY HIGH COURT IN THE CASE OF DAYARAM VASUDEO (SUPRA) HAS, WHILE DEALING WITH A SIMILAR I SSUE, INTER ALIA OBSERVED THAT IF THE ASSESSEE AGREES TO ADDITI ON TO INCOME AND SUBSEQUENTLY THE CHARTERED ACCOUNTANT FURNISHES AN AFFIDAVIT SHOWING THAT THE ADMISSION BY THE ASSESSEE WAS MADE ERRONEOUSLY, THEN THE TRIBUNAL IS JUSTIFIED IN DELE TING THE ADDITION. IN THE INSTANT CASE, IT IS NO DOUBT TRUE THAT THE A UTHORISED REPRESENTATIVE OF THE ASSESSEE HAD AGREED BEFORE TH E ASSESSING OFFICER FOR THE IMPUGNED ADDITIONS TO BE MADE. HOWE VER, ON FACTS IT IS SEEN THAT THE AGREEMENT MADE BY THE AUTHORISE D ITA.2787/BANG/2017 PAGE - 5 REPRESENTATIVE IS ERRONEOUS. THIS BEING SO, IT CANN OT BE SAID THAT THE ASSESSEE IS NOT AGGRIEVED BY THE ORDERS OF ASSE SSMENT MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE AGREEM ENT MADE BY THE AUTHORISED REPRESENTATIVE AND CONSEQUENTLY HE C ANNOT BE DENIED THE RIGHT OF VINDICATING HIS GRIEVANCE BEFOR E A HIGHER FORUM. APART FROM THE ABOVE, THE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF CHHAT MULL AGGARWAL V. CIT [1979] 116 ITR 694 HAS INTER ALIA LAID DOWN THAT THERE IS NO PROVISIO N 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. (SU PRA) THE MADRAS HIGH COURT WHILE CONSIDERING THE SCOPE OF TH E APPELLATE POWERS AND JURISDICTION OF THE TRIBUNAL, HASINTER ALIA OBSERVED: '... THE PRIMARY PURPOSE OF THE STATUTE IS TO LEVY AND COLLECT THE INCOME- TAX. THIS IS BASED ON THE CARDINAL PRINCIPL E, WHICH HAS BEEN INCORPORATED AS A VERITABLE CONSTITUTIONAL PRO VISION, THAT NO TAX CAN BE LEVIED OR COLLECTED SAVE UNDER AUTHORITY OF LAW. THE TASK OF AN APPELLATE AUTHORITY UNDER THE TAXING STA TUTE, ESPECIALLY A NON-DEPARTMENTAL AUTHORITY LIKE THE TRIBUNAL, IS TO ADDRESS ITS MIND TO THE FACTUAL AND LEGAL BASIS OF AN ASSESSMEN T FOR THE PURPOSE OF PROPERLY ADJUSTING THE TAXPAYERS LIABIL ITY TO MAKE IT ACCORD WITH THE LEGAL PROVISIONS GOVERNING HIS ASSE SSMENT. SINCE THE BE-ALL AND END-ALL OF THE STATUTORY PROVISIONS, ESPECIALLY THOSE RELATING TO THE ADMINISTRATION AND MANAGEMENT OF IN COME-TAX, IS TO ASCERTAIN THE TAXPAYERS LIABILITY CORRECTLY, TO THE LAST PIE, IF IT WERE POSSIBLE, THE VARIOUS PROVISIONS RELATING TO A PPEAL, SECOND APPEAL, REFERENCE AND THE LIKE CAN HARDLY BE EQUATE D TO A LIS OR DISPUTE AS ARISES BETWEEN THE TWO PARTIES IN A CIVI L LITIGATION. ALTHOUGH THE INCOME-TAX STATUTE MAKES THE DEPARTMEN T OR ITS OFFICERS FIGURE AS PARTIES IN APPEAL PROCEEDINGS, T HEY ARE NOT IN THE STRICT SENSE WHAT ARE CALLED BY AMERICAN WRITER S AS PARTIES TO ADVERSARY PROCEEDINGS. THIS IS SO, BECAUSE THE VERY OBJECT OF THE APPEAL IS NOT TO DECIDE A POINT RAISED AS A DISPUTE , BUT ANY POINT WHICH GOES INTO THE ADJUSTMENT OF THE TAXPAYERS LI ABILITY. IN THAT SENSE, A VIEW PREVAILS. EVEN IS ENGLAND, THAT THE A UTHORITIES ITA.2787/BANG/2017 PAGE - 6 SITTING IN APPEAL IN A TAX CASE, CANNOT BE REGARDED AS DECIDING ALLS, BUT THEY ARE ONLY ENGAGED IN AN ADMINISTRATIV E ACT OF ADJUSTING THE TAXPAYERS LIABILITY. UNDER OUR FISCA L JURISPRUDENCE, WE MAY REGARD THE APPELLATE AUTHORITIES AS EXERCISI NG QUASI- JUDICIAL FUNCTIONS IN THE SAME SENSE AS A TAXING OF FICER DOES. BUT, EVEN SO, THE PROCEEDINGS BEFORE THEM LACK THE BASIC ELEMENTS OF ADVERSARY PROCEEDINGS. IT, THEREFORE, FOLLOWS THAT THE DISCUSSION AND THE SCOPE OF THE APPELLATE JURISDICTION OF THE TRIBUNAL AND OTHER AUTHORITIES UNDER THE TAX CODE CANNOT BE PURS UED BY DRAWING A PARALLEL TO CIVIL LITIGATION WITH PARTICU LAR REFERENCE TO APPEALS FROM DECREES, AND THE LIKE. THE INSISTENCE ON ONE PARTY TO THE APPEAL BEING ENTITLED TO THE FRUITS OF FINALITY , AS IT IS CALLED, AND THE APPELLATE AUTHORITY BEING CONFINED TO THE S UBJECT-MATTER OF THE APPEAL ARE ALL IDEAS WHICH MIGHT HAVE RELEVA NCE IF THE DISCUSSION CENTRES ON PURELY CIVIL LITIGATION AND S UCH LIKE ADVERSARY PROCEEDINGS AS IN AN INDUSTRIAL DISPUTE. BUT IN A CASE WHERE THE REVENUE IS ALL THE WHILE A PARTY, IN A MA NNER OF SPEAKING, AND IS ALSO AT THE SAME TIME, AN AUTHORIT Y VESTED WITH THE RESPONSIBILITIES OF DRAWING UP THE ASSESSMENT A ND LAYING DOWN THE CORRECT LIABILITY, IT WOULD NOT BE IN ACCO RD WITH THE SCHEME OF THE ACT TO IMPOSE RESTRICTIONS ON THE AMB IT AND THE POWER OF THE TRIBUNAL BY SUCH LIKE NOTIONS AS FINAL ITY, SUBJECT- MATTER OF THE APPEAL, AND THE LIKE. . . .' 9. FROM THE AFOREMENTIONED FACTS, IT IS CLEAR THAT TH ERE IS NO LIS IN THE STRICT SENSE OF THE TERM AS SUCH BETWEEN THE AS SESSEE AND THE REVENUE UNDER THE VARIOUS PROVISIONS RELATING TO TH E SECOND APPEAL, REFERENCE, ETC. IT IS ALSO SEEN THAT THE PA RTIES IN APPEAL PROCEEDINGS ARE NOT PARTIES TO ADVERSARY PROCEEDING S. ON THE OTHER HAND, THE MAIN OBJECT OF THE ADMINISTRATION A ND MANAGEMENT OF INCOME-TAX IS TO ASCERTAIN THE TAX PA YERS LIABILITY CORRECTLY. IN THE INSTANT CASE, AS ALREADY STATED, THE ASSESSEES AUTHORISED REPRESENTATIVE HAD ADMITTED BEFORE THE A SSESSING OFFICER THAT THE SUBJECT ADDITIONS MAY BE MADE TO T HE TOTAL INCOME OF THE ASSESSEE. HIS AGREEMENT FOR THE IMPUG NED ADDITIONS IS BASED UPON MISAPPREHENSION OF FACTS AN D MISTAKEN BELIEF. CONSEQUENTLY THE ASSESSMENTS WERE MADE BY T HE 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 THA T AN APPEAL LIES TO THE APPELLATE FORUM FROM THE ORDERS OF THE ASSESSMENT SO ITA.2787/BANG/2017 PAGE - 7 MADE ESPECIALLY KEEPING IN VIEW THE MADRAS HIGH COU RTS JUDGMENT IN THE CASE OF INDIAN EXPRESS (MADURAI) P. LTD. (SUPRA), WHEREIN IT WAS HIGHLIGHTED THAT AN AS SESSMENT IS NOTHING BUT AN ASCERTAINMENT OF THE TAX LIABILITY O F THE ASSESSEE CORRECTLY. 03. ON THE OTHER HAND THE LD. DR RELIED UPON THE OR DER PASSED BY THE AUTHORITIES BELOW. 04. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN OUR CONSIDERED OPINION, THE PROPOSITION CANVASSE D BY THE ASSESSEE THAT THE ADMISSION MADE BY THE AUTHORISED REPRESENTATIVE IS NOT BINDING ON THE ASSESSEE, IS NOT ABSOLUTE AND CO RRECT PROPOSITION OF LAW . THE AUTHORISED REPRESENTATIVE IS EMPOWERE D AND AUTHORISED IN LAW TO REPRESENT IN PLACE OF THE ASSESSEE AND FU RTHER THE AUTHORISED REPRESENTATIVE, IS EMPOWERED TO MAKE THE STATEMENT FOR AND ON BEHALF OF THE ASSESSEE. THE AO, WHILE ADJUD ICATING THE ISSUE HAD GIVEN THE FINDINGS IN DETAIL AND DECIDED THE I SSUES ON MERIT RATHER THAN MERELY RELYING ON THE BASIS OF THE ADM ISSION MADE BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE. THOUGH IN LAW, WE DO NOT AGREE WITH THE PROPOSITI ON CANVASSED BEFORE US THAT THE ADMISSION MADE IN THE ASSESSMENT PROCEEDINGS IS NOT BINDING, AS IT IS FOR THE ASSESS EE TO SATISFY THE FIRST APPELLATE AUTHORITY UNDER WHAT CIRCUMSTANCES THE SA ID ADMISSION WERE MADE AND WHY THE ADMISSIONS ARE NOT BINDING O N THE ASSESSEE . IN THE CONSIDERED OPINION OF THE BENCH THE SAID SUBMISSIONS (NON BINDING OF ADMISSION) SHOULD BE SUPPORTED BY AN AFF IDAVIT OF THE AUTHORISED REPRESENTATIVE IN THE ASSESSMENT PROCEED INGS. IN THAT EVENTUALITY, THE FIRST APPELLATE AUTHORITY SHALL BE DECIDING ON NON ITA.2787/BANG/2017 PAGE - 8 BINDING EFFECT OF ADMISSION MADE BY THE AUTHORISED REPRESENTATIVE. IT IS A SETTLED PROPOSITION OF LAW THAT THE PROCEDU RE OF THE TRIBUNAL OR THE ASSESSMENT PROCEEDINGS ARE AKIN TO CIVIL PRO CEEDINGS AND FOR THAT PURPOSES NOT ONLY THE PRINCIPLE OF NATURAL JUS TICE BUT ALSO THE PROCEDURE AS PROVIDED UNDER THE CIVIL PROCEDURE COD E CAN BE RESORTED TO. THOUGH IT IS CORRECT THAT THE PURPOSE OF ADJUDICATION BY THE AO / CIT (A) OR PER SE, THE TRIBUNAL IS TO DETE RMINE THE TAX PAYERS LIABILITY CORRECTLY, BUT ON THE OTHER HAND IF THE ASSESSEE OR THE AUTHORISED REPRESENTATIVE AGREES TO PAY THE TAX ES EITHER DURING THE ASSESSMENT PROCEEDINGS OR SUBSEQUENTLY THEN, TH IS DEFENCE OF NON ADJUDICATION BY THE AUTHORITIES ON MERIT WOULD NOT BE AVAILABLE TO THE ASSESSEE AS ASSESSEE IS RESPONSIBLE FOR NO N ADJUDICATION . 05. THE CIT (A) RELIES UPON THE VARIOUS DECISIONS R ENDERED BY VARIOUS COURTS MENTIONED HEREIN ABOVE AND ALSO THE HONBLE SUPREME COURT. MORE PARTICULARLY, R. T. BALASUBRAM ANIAM (SUPRA) AND OF THE HONBLE KERALA HIGH COURT IN MAHESH & SH AH [238 ITR 130]. WE ARE OF THE OPINION THAT THE STRICT RULES OF COMM ON LAW, NAMELY, CIVIL PROCEDURE CODE, EVIDENCE ACT OR CRIMI NAL PROCEDURE CODE ARE NOT APPLICABLE, BUT IN THE OPINION OF THE BENCH, SECTION 18 OF THE EVIDENCE ACT, PROVIDES THE EFFECT OF ADMISSI ON MADE BY THE ASSESSEE IN ANY PROCEEDINGS OR BY HIS AGENT. SECTI ON 18 OF THE EVIDENCE ACT, PROVIDES AS UNDER : 18. ADMISSION BY PARTY TO PROCEEDING OR HIS AGENT. STATEMENTS MADE BY A PARTY TO THE PROCEEDING, OR BY AN AGENT T O ANY SUCH PARTY, WHOM THE COURT REGARDS, UNDER THE CIRCUMSTAN CES OF THE CASE, AS EXPRESSLY OR IMPLIEDLY AUTHORIZED BY HIM T O MAKE THEM, ITA.2787/BANG/2017 PAGE - 9 ARE ADMISSIONS. BY SUITOR IN REPRESENTATIVE CHARACT ER. STATEMENTS MADE BY PARTIES TO SUITS, SUING OR SUED IN A REPRESENTATIVE CHARACTER, ARE NOT ADMISSIONS, UNLES S THEY WERE MADE WHILE THE PARTY MAKING THEM HELD THAT CHARACTE R. STATEMENTS MADE BY (1) PARTY INTERESTED IN SUBJECT-MATTER.PERSONS WHO HA VE ANY PROPRIETARY OR PECUNIARY INTEREST IN THE SUBJECT-MA TTER OF THE PROCEEDING, AND WHO MAKE THE STATEMENT IN THEIR CHA RACTER OF PERSONS SO INTERESTED, OR (2) PERSON FROM WHOM INTEREST DERIVED.PERSONS FROM WH OM THE PARTIES TO THE SUIT HAVE DERIVED THEIR INTEREST IN THE SUBJECT-MATTER OF THE SUIT, ARE ADMISSIONS, IF THEY ARE MADE DURIN G THE CONTINUANCE OF THE INTEREST OF THE PERSONS MAKING T HE STATEMENTS. FROM A PERUSAL OF THE ABOVE, IT IS CLEAR THAT THE A DMISSION MADE BY THE AUTHORISED REPRESENTATIVE IN THE PROCEEDINGS HA VING 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. FURTHER, IN OUR VIEW, THE JURI ST ENTITY LIKE THE ASSESSEE BEFORE US, SHALL ALWAYS BE REPRESENTED EIT HER THROUGH THE DIRECTOR OR THE MD OR THE COMPANY SECRETARY OR BY A NY OTHER PERSON INCLUDING THE AUTHORISED PERSON THROUGH A BO ARD 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. RESPECTFULLY FOLLOWING THE JUDGMENT O F THE HONBLE SUPREME COURT RELIED UPON BY THE CIT(A) , WE HOLD T HAT THE STATEMENT MADE BY THE AUTHORISED REPRESENTATIVE, WH O HAS BEEN EXPRESSLY AUTHORISED BY THE ASSESSEE, BINDS THE ASS ESSEE. 06 HAVING SAID SO, IF WE LOOK INTO THE FACTS OF THE PRESENT CASE, THE CIT (A), DESPITE HAVING ADJUDICATION, BY THE A O, ON MERIT ALBEIT REORDERING ADMISSION, HAS NOT ADJUDICATED THE GROUNDS ON ITA.2787/BANG/2017 PAGE - 10 MERIT AND HAS DECIDED THE APPEAL MERELY ON THE BAS IS OF THE ADMISSION MADE BY THE AUTHORISED REPRESENTATIVE. I N 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 TH E CIT (A) ON MERIT AS AO HAD DECIDED THE ISSUES ON MERIT AND THE REAFTER HAD RECORDED ADMISSION . THEREFORE WE REMAND THE MATT ER BACK TO THE FILE OF THE CIT (A) FOR DE-NOVO DECISION ON ALL THE GROUNDS . NEEDLESS TO SAY IT WILL BE DONE AFTER FOLLOWING THE DUE PROCEDURE AND AFFORDING OPPORTUNITY TO THE ASSESSEE. 06. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH DAY OF JUNE, 2018. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 05.06.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.