ITAT Permits Use of Survey Docs. against Assessee Despite Retracted Statement on Oath

Case Details: Bhimsen Darbarilal Arora v. ACIT - [2023] 150 taxmann.com 68 (Surat-Trib.)

Judiciary and Counsel Details

• • Pawan Singh, Judicial Member and Dr. A.L. Saini, Accountant Member
  • Akshay Modi, CA for the Assessee. 
  • Ashok B. Koli, CIT(DR) for the Respondent.

Facts of the Case

Later, the assessee claimed that the survey was illegal, i.e., without jurisdiction, and the statement was retracted after 822 days. However, the Assessing Officer (AO) proceeded to make additions to the income.

On appeal, the CIT(A) confirmed the additions made by AO. Aggrieved by the order, the assessee preferred an instant appeal to the Surat Tribunal.

ITAT Held

The Tribunal held that admission on oath could be retracted by the assessee only if the assessee establishes the circumstances such as threat, coercion, undue pressure etc. But in the instant case, no such evidence could be produced by the assessee. After a lapse of more than 822 days, the assessee retracted the statement; therefore, retraction of the statement after more than two years is nothing but an eyewash.

Further, placing the reliance on Supreme Court’s Judgment in the case of Dr. Partap Singh v. Director of Enforcement [1985] 22 Taxman 30 (SC), it was held that the illegality of the search does not vitiate the evidence collected during such illegal search. Even though the search and seizure contravened the provision of section 132, the material seized would be liable to be used against the person from whose custody it was seized.

In the instant case, the addition was made by AO based on the documents and evidence collected during the survey and not based on the statement. The documents found in the survey can be used against the assessee even if the assessee retracts the statement on oath.