Whether separate written retraction requirement is fastened upon assessee either u/s 133A or any other provisions of the Act?

 

Here is an interesting judgment in the case before Pune ITAT in the following case:

ITAT PUNE- M/S SHEETAL COLLECTION VERSUS DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, JALGAON.,.- ITA No. 1074/PUN/2024
Dated.- August 1, 2024

Let us have a short overview of the case:

The clause (iii) of s/s (3) of section 133A of the Act empowers an income tax authority to record statement of any person which may be useful for or relevant in connection with ongoing survey proceedings. This provision however does not specify as to whether such statement is to be recorded on oath or otherwise, because a Statement recorded on oath carries evidential value and automatically binds the assessee unlike the statement recorded otherwise than on oath.

In this context we note that, *Hon’ble High Court ‘Paul Mathews & Sons Vs CIT’ [2003, 263 ITR 101 (Ker)]* has settled a position of law by categorically holding that power to examine a person on oath is explicitly conferred u/s 132(4) of the Act only in search or seizure cases, and no such authorisation has been expressly provided in section 133A of the Act.

The question of entitlement to record the statement on oath in the course of survey operation is put to rest by the Hon’ble Supreme Court in ‘CIT Vs S. Khader Khan Son’ [2012, 352 ITR 480] whereby it is settled that, section 133A of the Act does not empower tax authorities to examine any person on oath, therefore, statement obtained thereunder would not automatically bind the assessee.

In the instant case, admittedly the partner of the assessee firm in a statement recorded u/s 133A of the Act has admitted the impugned sum as an additional income of ₹8,00,000/- of his firm towards probable errors & omissions which was unknown to both the rival parties at the time of survey.

The said disclosure/admission was simply made under the pretext that the Revenue may at any time thereafter would discover the same and probably tax it as non-business income of the assessee.

However, in the ITR filed the assessee offered all the additional income admitted by it in the statement recorded u/s 133A of the Act but the impugned sum, for the reasons that both the parties could neither discover any error or omission nor there was any in the records, books & documents etc., came to surface.

Insofar as the retraction of statement is concerned, unlike admission made in statement recorded u/s 133A of the Act, the assessee may specifically be required in writing to retract the admission made on ‘statement on oath’ u/s 132 of the Act.

The non-inclusion of admitted sum/amount in the return of income filed by the assessee itself solitarily sufficient to constitutes retraction from the admission so made while recording the statement u/s 133A of the Act. There is no separate written retraction requirement is fastened upon assessee either u/s 133A or any other provisions of the Act, therefore such requirement cannot be created one for the purpose of assessment/adjudication.

The copy of the order is as under:

 

1722487156 P282 ITA 1074 PUN 2024 133A additional income for errors etc