TMI Blog2014 (11) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ansport [1998 (8) TMI 51 - ANDHRA PRADESH High Court] - the question of examining any person by the authorised officer arises only when he found such person to be in possession of any undisclosed money or books of account - when the managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers u/s 132(4) does not arise - This provision embedded in sub-section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement – thus, the order of the Tribunal is upheld – Decided against revenue. - I.T.T.A No. 112 of 2003 - - - Dated:- 9-9-2014 - L. Narasimha Reddy And Challa Kodanda Ram,JJ. For the Appellant : Sri S.R. Ashok For the Respondent : Sri Y. Ratnakar JUDGMENT (Per Honble Sri Justice L.Narasimha Reddy) The respondent is an assessee under the Income Tax Act, 1961 (for short, the Act). A search was conducted in his p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement is recorded during the course of search, that it can be treated as the one under sub- section (4) of Section 132 of the Act and that in the instant case, the search took place on 09.01.1996, but and the statement was recorded 2 months thereafter i.e., on 20.03.1996. The learned counsel further submits that certain observations made by the Kerala High Court run contrary to the very basic principles of evidence and at any rate, the facts of that case are totally different from those of the present case. He has drawn our attention to the instructions issued by the Central Board of Direct Taxes in the year 2003, and submitted that a statement, even if properly recorded under sub-section (4) of Section 132 of the Act cannot constitute the sole basis for levying penal tax under Chapter XIVA of the Act. It is not in dispute that the search was conducted in the premises of the respondent on 09.01.1996. It appears that nothing incriminating was found or recovered during the search. It was only two and half months thereafter i.e., on 20.03.1996, that a statement was recorded from the respondent. The statement is sought to be treated as the one under sub-section (4) of Section 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent. Sub-section (4) of Section 132 of the Act itself, is to the effect that the statements recorded shall be treated as piece of evidence in the proceedings under the Act. That would be so, as long as the statement is not retracted. If the assessee comes forward with a plea that his statement was recorded under threat or coercion, the evidentiary value of the statement suffers a serious dent. The mandate under sub-section (4) gets honoured only when there is no other version from the assessee, vis--vis the statement. In such a case, the statement would constitute the basis for making block assessment even if the Department does not have any other material to buttress its case. However, if the statement is retracted by the person from whom it is said to have been recorded, it has to be subjected to the same test, as is done in matters of similar nature. This is particularly so, when the person, from whom it is recorded, is going to be visited with penal consequences. Sub-section (4) of Section 132 of the Act cannot be taken as a provision laying down any new principle in the law of evidence. For all practical purposes, the statement recorded under sub-section (4) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in respect of a fact, to be proved. If the contents of the statement recorded from an assessee are to be proved, that very statement cannot be a proof, by itself. Such a course would bring about hypellage logic, which is illustrated by a well known example. Q: who is a doctor? Ans: The one who administers Medicine. Q: What is Medicine? Ans: The one that is administered by a doctor. Such discussion does not lead one, any further. The discharge of burden must be in respect of the plea taken by the Department and the burden can be discharged only through material, which is over and above what was stated in their case. The statement assumes the character of proven fact, only when it is not denied by the assessee. The circumstances under which a statement is recorded from an assessee, in the course of search and seizure, are not difficult to imagine. He is virtually put under pressure and is denied of access to external advice or opportunity to think independently. A battalion of officers, who hardly feel any limits on their power, pounce upon the assessee, as though he is a hardcore criminal. The nature of steps, taken during the course of search are sometimes f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It reads: Confession of additional Income during the course of search and seizure and survey operation regarding: Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search and seizure and survey operations. Such confession, if not based upon credible evidence, are alter retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search and seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income, which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search and seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officer should rely upon the evidences/materials gathered during the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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