why does not atomic mass of an element represent the actual mass of its atom
The difference in mass between the actual mass of a nucleus and the sum of the masses of the individual nucleons i.e. atomic mass, is called mass defect. The equivalent energy corresponding to this difference in mass binds the nucleons of the nucleus. It is measured in mass.
Binding energy is the energy required to disassemble a nucleus into its constituent nucleons. It is measured in Joule.
Binding energy, E = Δm c2
Where Δm = mass defect
c = speed of light.