TMI Blog2007 (7) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ue ? (ii) Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in not considering the fact that the Branch Contractors Agents Account Book in which entries were made subsequent to the survey and not found during the survey nor produced the survey, could be relied upon ? (iii) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in not considering the fact that the voluntary statement made without any coercion or duress given during the course of survey action under Sec.133A could form the basis of the assessment ?" 2. The brief facts are: The assessment year involved in this appeal is 2001-02. The assessee filed its return of income on 29.10.2001 disclosing an income of Rs.12,640/-. The return was processed under Section 143(1) of the Income-tax Act, 1961 (in short 'the Act') on 27.8.2002 and notice under Section 143(2) of the Act was issued on 27.8.2002 and served on the assessee on 24.9.2002. In the instant case, a survey action was conducted under Section 133A of the Act on 24.7.2001 in the premises of the assessee at 90, Syed Mada Street, Shevapet, Salem and one of the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , held the issue in favour of the assessee. On appeal, at the instance of the Revenue, the Appellate Tribunal holding that there was no infirmity in the order of the Commissioner, dismissed the Revenue's appeal. Hence, the present appeal by the Revenue, raising the substantial questions of law referred to above. 5. All the three substantial questions of law raised by the Revenue revolve on the vexed question whether the materials collected and the statement elicited during the survey operation under Section 133A of the Act had any evidentiary value. For the purpose of clarity, it is apt to refer Sections 132(4) and 133A of the Act, which are extracted as hereunder: " 132. Search and Seizure. (1) ....... (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. Explanation .- For the removal of doubts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and before sunset. (3) An income-tax authority acting under this section may,-- (i) if he so deems necessary, place marks of identification on the books of account or other documents inspected by him and make or cause to be made extracts or copies therefrom, (ii) make an inventory of any cash, stock or other valuable article or thing checked or verified by him, (iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act. (4) An income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein he has entered, any books of account or other documents or any cash, stock or other valuable article or thing. (5) Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the income-tax authority is of the opinion that it is necessary or expedient so to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who, in the opinion of the income-tax authority, is likely to possess information as respects the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no material on record to prove the existence of such disclosed income or earning of such income in the hands of the assessee, it could not be said that the Revenue had lost lawful tax payable by the assessee. 7. In the decision in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [(1973) 91 I.T.R. 18], the Apex Court held that an admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect. 8. Where a survey was conducted in the premises of the assessee, a medical practioner, and a statement was recorded from him, in which the assessee surrendered additional income and pursuant to the same, the assessing officer reopened the assessment, but during the course of which the assessee retracted the additional income offered and contended that the statement was the result of duress, which was not accepted by the assessing officer and also by the Tribunal holding that the statement is valid and that it was made without duress, a Division Bench of the Allahabad High Court The Allahabad High Court in Dr.S.C.Gupta v. Commissioner of Income-tax [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Division Bench of the Kerala High Court, appreciating the stand taken by the assessee and after referring to Section 133A of the Act, held as hereunder: ".. we find that the power to examine a person on oath is specifically conferred on the authorised officer only under section 132(4) of the Income-tax Act in the course of any search or seizure. Thus, the Income-tax Act, whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas section 133A does not empower any Income-tax Officer to examine any person on oath. Thus, in contradistinction to the power under section 133A, section 132(4) of the Income-tax Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law . Therefore, the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocus 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 Department. Similarly, while recording statement during the course of search seizure 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 officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders." 14. From the foregoing discussion, the following principles can be culled out:- (i) An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of accounts do not correctly disclose the correct state of facts, vide decision of the Apex Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [(1973) 91 I.T.R. 18]; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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