TMI Blog2014 (11) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... . AO does not have any power, right or jurisdiction to tell, much less to decide, upon the nature of withdrawal or retraction. His duty ends where the statement is recorded. If the statements are retracted, the fate thereof must be decided by law meaning thereby, a superior forum and not by the very authority, who is alleged to have exerted force. It is not as if the retraction from a statement by an assessee would put an end to the procedure that ensued on account of survey or search. AO can very well support his findings on the basis of other material. If he did not have any other material, in a way, it reflects upon the very perfunctory nature of the survey. We find that the appellate authority and the Tribunal did not apply the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded from all the three partners in this behalf. The differential amount was treated as undisclosed income of the firm and one-third each of the same was added to the income of the partners. Accordingly, notices were issued under section 148 of the Income-tax Act, 1961 (for short the Act ) and not satisfied with the reply submitted by the partners, the Assessing Officer passed identical orders of assessment dated December 1, 1998, against them. The tax was determined and interest was levied thereon. 2. The three partners filed appeals before the Commissioner of Income-tax (Appeals). The appeals were partly allowed through a common order dated June 9, 1999. Thereupon, the appellants filed I.T.A. Nos. 597 to 599/Hyd/99 before the Hyderaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i J.V. Prasad, learned counsel for the respondent, on the other hand, submits that the statements were made by the appellants on their own accord and obviously, for that reason, the Assessing Officer did not proceed further in the survey, and gather other material. He contends that in case the statements were recorded under threat, coercion or duress, the normal course of conduct would have been to retract from them at the earliest, and that, in the instant case, the so-called retraction is after more than one year from the date of recording of the statements. He submits that the Assessing Officer, the Commissioner of Income-tax (Appeals) and the Tribunal have decided the matter correctly and no interference is warranted. 6. The proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement in the concerned proceedings but also in other proceedings that are pending, by the time the statement was recorded. 9. If the statement is not retracted, the same can constitute the sole basis for the authorities to pass an order of assessment. However, if it is retracted by the person from whom it was recorded, totally different considerations altogether, ensue. The situation resembles the one, which arises on retraction from the statement recorded under section 164 of the Code of Criminal Procedure. The evidentiary value of a retracted statement becomes diluted and it loses the strength, to stand on its own. Once the statement is retracted, the assessing authority has to garner some support, to the statement for passing an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed facts of the case, there was absolutely no basis for the Assessing Officer to fasten the liability upon the appellants. Our conclusion find support from the Circular dated March 10, 2003, issued by the Central Board of Direct Taxes, which took exception to the initiation of the proceedings on the basis of retracted statements. 13. Therefore, I.T.T.A. Nos. 268, 273 and 308 of 2003 are allowed and the orders of assessment dated December 1, 1998, are set aside. Since the orders of assessment are set aside, I.T.T.A. Nos. 287, 291 and 294 of 2006 have virtually become infructuous and they are, accordingly, closed. There shall be no order as to costs. Miscellaneous petitions, if any, pending in these appeals shall also stand disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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