TaxTMI 
TaxTMI 
2008 (1) TMI 372
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....ommissioner of Income-tax (Appeals). 2. The respondent-assessee is a partnership firm which indulged in extraction of iron-ore from mines taken on lease and exports it through Minerals and Metal Trading Corporation of India Ltd., Madras. The assessee during the relevant assessment years had filed the return of income. There was a search conducted on the premises of the assessee on December 12 and 13, 1994. A statement under section 132(4) of the Income-tax Act was recorded by the authorised officer at the instance of the partners of the assessee. They agreed to disclose voluntarily offering a tax on the income of Rs. 1,15,00,000 subject to deduction under section 80HHC for the assessment years 1992-93 to 1995 -96. Later on one of the par....
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.... Appellate Tribunal, which appeal was allowed by the Tribunal after hearing the learned counsel appearing for both the parties; by holding that the letter dated January 25, 1995, could not have been considered by the Assessing Officer and he could not have passed an order of assessment without considering the revised returns filed by the assessee. Accordingly, the appeal was allowed in part, however, the Tribunal has directed the Assessing Officer to consider the statement made under section 132(4) of the Income-tax Act on December 13, 1994, before the authorised officer, wherein the respondent-assessee-firm had agreed to offer voluntarily an income of Rs. 1,15,00,000 subject to deduction under section 80HHC of the Income-tax Act. Being agg....
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....of the Indian Evidence Act while rejecting the letter dated January 25, 1995. He further submits that when a voluntary statement has been made by the assessee, the same should have been considered as admission on the part of the assessee and that the Assessing Officer and the Commissioner of Income-tax (Appeals) were justified in rejecting the contention of the assessee. Therefore, he requests the court to allow the appeal. 7. Per contra, Mr. Javali, learned counsel appearing for the respondent that the letter dated January 25, 1995, cannot be treated as a statement said to have been recorded under sub-section (4) of section 132 of the Income-tax Act. He further contends that the letter dated January 25, 1995, cannot be treated as an adm....
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....y 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." 9. Under sub-section (4) of section 132 of the Income-tax Act, an authorised officer during the course of search or seizure can examine on oath any person who is found to be in possession or control of any books of account, document, money, etc., and any statement made by such person during such examination may thereafter be used in evidence in any proceedings under the Income-tax Act. 10. In the instant case, letter dated January 25, 1995, cannot be treated as a statement said to have been made under sub-section (4) of section 132 of the Income-tax Act sin....
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....ated January 25, 1995, it is clear to us that there is no unconditional disclosure of income by the assessee. A partner of the assessee has stated in the said letter that a revised return would be filed claiming deduction under section 80HHC and in the said letter, he has only requested not to initiate any penal action against the partners of the assessee. Therefore, it is clear that solely relying upon the letter dated January 25, 1995, the Assessing Officer could not have passed an order of assessment rejecting the revised return filed by the assessee. It was the primary duty of the Assessing Officer to scrutinize the revised return filed by the assessee and if the Assessing Officer after scrutinizing the return had noticed any irregulari....
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....r pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions." 14. Relying upon section 58 of the Indian Evidence Act, the learned counsel for the Revenue contends that the Tribunal could not have rejected the letter dated January 25, 1995, addressed by a partner of the assessee since there is a clear admission on the part of the assessee in regard to undisclosed income. According to him, it is an offer voluntarily made by a partner offering additional income of Rs. 1,47,00,000 for a period of four years which is inclusive of Rs. 1,15,00,000 disclosed at the time of recording the statement u....