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2014 (11) TMI 513 - HC - Income TaxScope and ambit of section 132(4) - Whether the Tribunal is justified in holding that Explanation to sec.132(4) is prospective in nature though the explanation laid down only rule of evidence and in that sense it is only procedural in nature – Held that:- Search and seizure for the purposes of preventing or detecting crime reasonably enforced was not inconsistent with the constitutional guarantee against search and seizure - the search of the assessee by a police officer was not justified by the warrant nor was it open to the officer to search the person of the appellant without taking him before a Justice of the Peace Nevertheless it was held that the court had a discretion to admit the evidence obtained as a result of the illegal search and the constitution protection against search of person or property without consent did not take away the discretion of the court. It was open to the court not to admit the evidence against the accused if the court was of the view that the evidence had been obtained by conduct of which the prosecution ought not to take advantage - But that was not a rule of evidence but a rule of prudence and fair play - the effect of explanation to Section 132(4) of the Act is that the AO can rely upon it in respect of pending proceedings also, as a piece of evidence, but not as the sole basis for imposing additional financial liability upon an assessee either in the form of denial of benefits which an assessee is otherwise entitled to, or subjecting him to prosecution - if there exists any other supportive material, the statement recorded u/s 132(4) can certainly be taken aid of - in the absence of other supporting material, a statement of that nature cannot constitute the basis to burden an assessee. Even in relation to the very block assessment, a statement referable to Section 132(4), but retracted by the person cannot constitute the sole basis - It can be relied upon if it is not retracted from and even if it is retracted from, it is supported by other material - The communication dated 11-03-2003 of the department to its officials throws light upon this - If the statement made during the course of search remains the same, it can constitute the basis for proceeding further under the Act, even if there is no other material - If, on the other hand, the statement is retracted, the AO has to establish his own case - The statement that too, which is retracted from the assessee, cannot constitute the basis for an order u/s 158BC of the Act – thus, the order of the Tribunal is upheld – Decided against revenue.
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