TaxTMI 
TaxTMI 
2003 (7) TMI 755
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....strict of Kamrup. On September 22, 1993, a search was conducted in its premises and those of its other groups in the course of which the books of account of the appellant was seized by the authorised officer under the Income-tax Act, 1961 (hereinafter referred to as the "Act"). During the search and seizure made under section 132(1) of the Act, certain statements of one of its partners were recorded under section 132(4) thereof. It is the case of the appellant that the said partner, Sri Baban Singh, was not a literate person and the income-tax authorities used force and coercion to compel him to sign the said statements which the said person did out of fear and compulsion. A copy of such statement as alleged by the appellant was made available after repeated requests only in the last part of November, 1993, whereafter Sri Baban Singh addressed a letter to the concerned Income-tax Officer retracting the statements made by him contending, inter alia, that as in the course of the search neither any bullion, money, jewellery or other valuable articles were found, nor had remained unexplained or unaccounted for, the question of making any disclosure of such assets for availing of immuni....
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....f threat, inducement or coercion and further there was a considerable time lag between the search and the letter dated December 24, 1993, retracting the statements. The orders of the Commissioner of Income-tax (Appeals), Guwahati, were set aside and the Tribunal directed that the orders of the Assessing Officer adding Rs. 4,00,000 to the taxable income of the appellant for both the assessment years be restored. Dr. Saraf has argued before us that the statements of the appellant's partner purportedly recorded in the course of the search conducted on September 22, 1993, having been made under inducement, threat and coercion, the same in any view of the matter, could not have been made the sole basis of assessment of the taxable income of the appellant firm and that therefore the learned Tribunal had grossly erred in law in reversing the orders of the Commissioner of Income-tax (Appeals). According to him, as in the course of the search, no money, bullion, jewellery or other valuable articles or any incriminating and/or unaccounted assets have been found or seized by the authorised officer, it was inconceivable that the appellant's partner would volunteer to make the statemen....
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...., Central Board of Direct Taxes, Government of India. By the said communication, the officers concerned had been advised to focus and concentrate on the collection of evidence of income leading to information as to what had been disclosed or not likely to be disclosed before the Department and as not to make attempts to obtain confessions as to the undisclosed income. Dr. Saraf sought to draw sustenance for his above submissions from a decision of the apex court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18. In reply, Mr. Sharma while supporting the impugned orders has argued that in view of the categorical findings of the Tribunal that neither any coercion was used nor there was any threat or inducement while recording the submission of the appellant's partner, no further opportunity to the appellant firm was necessary to be afforded and the Assessing Officer was perfectly justified in acting on the said disclosures to add Rs. 4,00,000 as its undisclosed income for assessing its tax liability. He further argued that no opportunity as such was also prayed for by the appellant before the Assessing Officer for producing its books of account and other ....
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.... 8,00,000 --------- This was on September 23, 1993, in the presence of two witnesses. The retraction of the statement came only on December 24, 1993, followed by a reiteration on the part of the appellant on February 20, 1995, in the course of the assessment proceeding. There is evidently a delay on the part of the appellant and its partners in retracting the statements recorded. The attention of this court has not been drawn to any material on record to establish that any attempt was made on behalf of the appellant to prove the allegation of inducement threat or coercion through the witnesses. We have examined the impugned orders rendered by the learned Tribunal with the reasonings in support of its finding against the complain of threat, inducement or coercion and we find no good and sufficient reason to differ from it. In our view, in....
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.... shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. (3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment." A plain reading of the above provision of law makes it manifestly clear that if the Assessing Officer while making the assessment of the tax liability considers it necessary to ensure that the assessee had not understated the income or had not computed excessive loss and had not underpaid the tax in any manner he shall serve on the assessee a notice requiring him either to attend his (Assessing Officer) office or to produce or cause to be produced any evidence on which the assessee may rely in support of the return. It is there....
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.... in law. When the law prescribes a mode of doing a thing, it has to be done in that way alone and all other modes of execution are impliedly prohibited. It is apposite to recall in this context an observation of the apex court in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 that the purpose of an assessment proceeding before the taxing authority is to assess correctly the tax liability of the assessee in accordance with law. Logically, therefore, if a procedure is established by law governing the said assessment it is incomprehensible that a deviation therefrom can be permitted and that too to the prejudice of the assessee. In Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC) relied upon by the learned senior counsel for the appellant the Kerala High Court had refused to direct the Tribunal to submit the two questions relating to disallowance of Rs. 79,680 as revenue expenditure of the appellant company. The disallowance had been on the ground that the expenses had been capitalised in the appellant company's accounts. The entries in the account books of the appellant company disclosed that the said amount was laid out or expended for the....