TaxTMI 
TaxTMI 
2014 (11) TMI 57
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....o truth in it. He stated that his undisclosed income is Rs. 65,020/- and that he is prepared to pay tax thereon. Faced with this situation, the Assessing Officer caused special audit under Section 142(2A) of the Act. The respondent is said to have not extended cooperation. Ultimately, an order was passed on 20.07.1997 by the Assessing Officer in exercise of powers under Section 158BC, read with Section 143(3) of the Act, determining the undisclosed income of the respondent as Rs. 15,00,000/-. A sum of Rs. 9,00,000/- was levied as tax thereon. Aggrieved by that, the respondent filed I.T.A(S.S.)A. No.204/Hyd/1997 before the Hyderabad A of the Income Tax Appellate Tribunal (for short, the Tribunal). The Tribunal allowed the appeal through order, dated 27.12.2001. Hence, this appeal by the Revenue. Sri S.R. Ashok, learned Senior Counsel for the appellant, submits that the Tribunal was mostly guided by the fact that the respondent has retracted from the sworn statement and it did not take into account, the evidentiary value of such a statement. He contends that the statement recorded on oath cannot be brushed aside just because the assessee has retracted from it, at a later point ....
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....Indian Income Tax Act, 1922 (11 of 1922), or under this Act. From a perusal of this, it becomes clear that the statement is required to be made during the course of search or seizure. The provision does not permit of any doubt that the statement must be recorded while the search is in progress, and before the search is concluded. The question of recording a statement, referable to the provision, after the conclusion of search, does not arise. There is not even any scope, to explain the delay, once the statement is recorded, after the search. In the instant case, the statement was not recorded during the course of search or seizure. To be precise, the search was made on 09.01.1996 and the statement was recorded on 20.03.1996. Such a statement can not at all, be brought under the fold of Section 132 (4) of the Act. Secondly, the recording of statement even during the search is not a matter of course. It is only when the material such as, books of account, documents, money, bullion, jewellery and the like are found or discovered during search, that the statement can be recorded. If the search did not lead to the discovery of any matters, referred to above, there would not be ....
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....pra) , the Kerala High Court took the view that a statement recorded under sub-section (4) of Section 132 of the Act can constitute the basis for passing a block assessment order, notwithstanding the retraction from it, by the assessee. The discussion in this behalf reads as under: 8. It cannot be doubted for a moment that the burden of proving the undisclosed income is squarely on the shoulders of the Department. Acquisition of properties by the assessee are proved with the documents seized in search. Since understatement of consideration in documents is the usual practice the officer questioned the assessee on payments made over and above the amounts stated in the documents. The assessee gave sworn statement honestly disclosing the actual amounts paid. The question now to be considered is whether the sworn statement constitutes evidence of undisclosed income and if so whether it is evidence collected by the Department. In our view, the burden of proof is discharged by the Department when they persuaded the assessee to state details of undisclosed income, which the assessee disclosed in his sworn statement, on being confronted with the title deeds seized in search. With grea....
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....nt must be in relation to the seized and recovered material, which is in the form of documents, cash, gold etc. It is, obviously to know the source thereof, on the spot. Beyond that, it is not a limited licence, to an authority, to script the financial obituary of an assessee. At the cost of repetition, we observe that 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 Assessing Officer has to establish his own case. The statement that too, which is retracted from the assessee, cannot constitute the basis for an order under Section 158BC of the Act. This, in turn, is referable to a time-tested right of an individual which is recognised under Article 20(3) of the Constitution of India which mandates no person, accused of any offence, shall be compelled to be a witness against himself. The citing of a statement of an individual as the only evidence, in the penal proceedings initiated against him, is never treated as part of a developed and mature legal system. Section 31 of the Evidence Act, 1872 also assum....
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....g of sub-section (4) shows that the authorised officer during the course of raid is empowered to examine any person if he is found to be in possession or control of any undisclosed books of account, documents, money or other valuable articles or things, elicit information from such person with regard to such account books or money which are in his possession and can record a statement to that effect. Under this provision, such statements can be used in evidence in any subsequent proceeding initiated against such person under the Act. Thus, 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. But, in this case, it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing director and other directors. In such a case, when the managi....