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TMI Blog2012 (7) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... block period in the notice - held that:- Thus, when the assessee received the notice issued on 5.8.99, the assessee had no doubt as to the nature of proceedings initiated, the purpose of the said proceedings and the block period for which proceedings were initiated. In the circumstances, it is too late for the assessee to contend that non mentioning of the block period would defeat the assessment proceedings. Recording / Retraction of statement - held that:- It may be seen that the assessee is stated to have written a letter on 12.6.2003 and 26.6.2003 and it is relevant to point out that the so called retraction came to be made only in the letter dated 26.6.2003, which clearly shows that it is merely an after thought to say that he made the statement under threat or coercion. Consequently, this ground fails. - Decided against the assessee. - TC(A). No. 1083 of 2005 - - - Dated:- 14-6-2012 - Mrs.Justice CHITRA VENKATARAMAN, Mr.Justice K.RAVICHANDRA BAABU, JJ. For Appellant : Mr.Vikram Sriram for M/s.G.R.Associates For Respondent : Mr.T.Ravikumar Standing Counsel JUDGMENT CHITRA VENKATARAMAN, J. The assessee is on appeal as against the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the transaction with the assessee who had purchased 3 acres of land from V.S.Kathirvel for a consideration of Rs.9,75,000/-. Enquiry proceedings were initiated against the assessee. The assessee participated in the enquiry proceedings and had given sworn statement on 5.8.1999 under Section 131 of the Income Tax Act. In answering the enquiry, the assessee is stated to have made the following statements, which, as recorded in the order of assessment and appeal, is the translation of the statement recorded in Tamil, which reads as under:- "Q9. I am showing the original sale deed of Rs.1,99,000/- purchased on 6.12.1995. This land of 3 acres was purchased on 6.12.95. Pl. State how much you gave and to whom? Whether this amount was accounted? Ans. I bought the above land of 3 acres through Sri.V.S. Kathirvel, Komarapalayam. Before buying this property, myself and V.S.Kathirvel made an agreement and I paid in cash towards the consideration. Since I have paid all the amount as per agreement, now do not have that agreement. According to that agreement, 1 acre = Rs.3,25,000/-, totalling to Rs.9,75,000/- for three acres. This amount was given by me to V.S.Kathirvel i.e. Rs.9,75,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the assessee confirmed that the purchase of the lands was at the cost of Rs.9,75,000/- and only a sum of Rs.1,95,000/- was recorded in the sale deed and the balance of Rs.7,80,000/- paid from out of undisclosed income. This led to the issuance of notice under Section 158BD read with Section 158BC dated 27.7.2001 served on the assessee on 3.8.2001. Thereafter, notice under Section 142(1), summons under Section 131 were also served. Admittedly the assessee participated in the enquiry proceedings. On 15.5.2002, the assessee filed a letter which reads as under:- "In response to the above, I beg to submit that I received your above referred notice directing me to file my block return on or before 15.5.2002. In this regard, I am to state that I am presently facing heavy financial crench and chronic liquidity problem and therefore, I could not make the payment of tax due for the block return and to file the same within 15.5.2002. In view of the same, I request your goodself to kindly grant me two months time for arrangement of funds for paying the necessary tax due under the block return in my individual status. I also undertake to pay the total tax due and interest thereon under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. As regards the balance amount of Rs.7,80,000/-, the assessee had not filed any explanation except to state that the sworn statement recorded on 5.8.1999 was not valid in law. On going through the records, the Assessing Authority, ultimately held that the assessee had undisclosed the income of Rs.7,80,000/- and the same was assessed at 60% of the undisclosed income. Interest under Section 158 BFA was also levied. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals), wherein the assessee took a plea that notice dated 27.7.2001 issued to the assessee did not indicate the block period, for which return was submitted. In considering the contentions of the assessee, the Commissioner of Income Tax (Appeals) pointed out to the answers given by the assessee at the time of enquiry and the filing of the return of income for the block period 1.4.89 to 19.8.1999. The first Appellate Authority pointed out that the assessee had complied with notice issued under Section 158BD and filed a return of income in Form 2B after ascertaining the block period. The conditions mentioned in Section 158BD were fulfilled before proceeding with the block assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued under Section 158BD, the Tribunal pointed out to the letter written by the assessee's counsel on 12.6.2003 that the said representative met the Assessing Officer after receipt of notice under Section 158BC and after ascertaining the details of block period, the return was also filed in Form 2B. The assessee was also summoned under Section 131 and he was examined about the purchase consideration. Thus, it was very clear that the assessee participated in the assessment proceedings knowing fully well about the block period and the details of undisclosed income which was subject matter of the enquiry. Therefore, non mentioning of the block period in the notice would not vitiate the assessment proceedings. 10. Even though learned counsel for the assessee raised a serious dispute on this aspect, we summoned the assessment files before this Court. On perusal of the same, we find that the return was filed by the assessee only after ascertaining the block period and such statement is also found even in the return itself filed by the assessee by way of remark as against the column of block period covered. 11. As regards the issue relating to the recording of the statement is conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Kathirvel and Arumugam and the statement recorded from the assessee clearly showed the consideration paid on the purchase of the landed property by the assesee. When the assessment was based on materials and information available on record, together with the statement made under Section 131, there was no substance in the contention of the assessee that the assessment which was made purely on the statement recorded could not be sustained. Thus, the Tribunal pointed out that since the contentions of the assessee is confined only to the technical aspects, they were not going in to the merit of the addition made by the lower authorities. Aggrieved by this, the assessee is before us. 14. Even though learned counsel appearing for the assessee reiterated the contentions in the grounds as had been taken before the Tribunal and contended that when the issuance of notice under Section 158BD is the very foundation to initiate proceedings against the assessee, the non mentioning of the block period in the notice would cut at the very root of the assessment proceedings. Learned standing counsel for the Revenue placed before us the decision reported in 287 ITR 242 SHIRISH MADHUKAR DALVI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the notice was not a circumstance which could be said to vitiate the ultimate order. The said decision relates to the assessment made consequent on the search conducted in assessee's place and notice was issued thereon to eight firms and to the wife of the assessee. Referring to Section 158BD, this Court held that non mentioning of the purpose for which the notice was issued or the source of the authority of the Officer issuing the notice per se would not defeat the aspect of the persons since the persons against whom the notice issued were fully aware of the purpose of issuing the notice. 17. In the light of the above said decision of this Court as well as in view of the Bombay High Court cited supra, we reject the contention of the assessee that the non mentioning of the block period would defeat the very assessment. Quite apart from this, the assessee participated in the enquiry conducted under Section 131 of the Income Tax Act and had also made a statement confirming the purchase of the land. Subsequent thereto, the assessee had participated in the enquiry and on 15.5.2002, in response to the notice under Section 142(1) the assessee expressed his inability to file the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), the contention of the assessee that the statement was recorded in violation of provisions of Order 18, Rules 5 8 of Code of Civil Procedure and Section 164 of the Code of Criminal Procedure fails. 20. As far as relevancy of the retraction statement is concerned, in the decision reported in [2008] 16 SUPREME COURT CASES 537 VINOD SOLANKI v. UNION OF INDIA, the Apex Court considered the similar contention, wherein the Apex Court pointed out that merely because a statement is retracted, it cannot be treated that the first statement was involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc., to establish that such improper means has been adopted. Going by the above said decision, taking note of the time of retraction, in the absence of any materials to substantiate the said contention, coupled with other material documents available in the form of seizure made on the premises of Kathirvel and Arumugam and the consistency in the answers made by the assessee, we reject the contention of the assessee that the department committed serious error in ignoring the retraction. The decision referred to by the assessee r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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