Contemporaneous admission during survey sustained penalty despite belated retraction and unsubstantiated coercion claim

A contemporaneous admission during survey that excess stock was found carried evidentiary value, and the assessee failed to displace it with a credible explanation. The later retraction, supported by an affidavit alleging coercion, was rejected because it was made after a long delay and was not backed by immediate complaint or convincing material. The additional affidavit could not properly be relied on at the appellate stage without affording the Assessing Officer an opportunity to respond. On that basis, the deletion of penalty by the appellate authorities was unsustainable and the Assessing Officer's penalty was upheld.

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Issues: Whether the penalty imposed on the basis of excess stock found during survey could be sustained despite a later retraction and an affidavit alleging coercion, and whether the appellate authorities were justified in deleting the penalty.

Analysis: The respondent assessee had admitted at the time of survey that excess stock was found and had no explanation to offer. The later attempt to retract, supported by an affidavit, was not substantiated by material and was made after a long lapse of time. Such belated retraction lost significance, especially when no immediate complaint or convincing evidence of coercion was produced. The additional affidavit was also accepted at the appellate stage without giving the Assessing Officer an opportunity to comment, which was impermissible. The contemporaneous statement recorded during survey had evidentiary value, and the assessee failed to discharge the burden of showing that it was wrong or obtained under pressure.

Conclusion: The deletion of penalty by the appellate authorities was unsustainable, and the penalty imposed by the Assessing Officer was rightly upheld.

Ratio Decidendi: A contemporaneous admission made during survey has evidentiary value and cannot be discarded on a belated and unsubstantiated retraction; any additional evidence at the appellate stage must be confronted to the Assessing Officer.

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