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TMI Blog2016 (10) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... n that he accepts the excess stock and he has no explanation to offer and that appropriate order be passed. Taking into consideration the aforesaid explanation the officers concerned imposed penalty u/s 77(8) of the Rajasthan Sales Tax Act, 1994. 3. The matter was assailed before the Dy. Commissioner (Appeals), who however taking into consideration that there was violation of R.50 of the Rajasthan Sales Tax Rules, 1995, the witnesses if any were employees of the assessee and they ought to have been independent witnesses, and that an affidavit was also filed before the Appellate Authority, that statements were recorded under coercion and pressure. The Dy. Com. (Appeals), taking into consideration these facts, deleted the penalty and further appeal filed by the Revenue before Tax Board also resulted in dismissal of the appeal upholding the order of Dy. Com. (Appeals). 4. Learned counsel for the petitioner vehemently contended that on the day of survey, excess stock was found and there was no explanation offered and there is no allegation about coercion or pressure on the assessee, which has not been proved at all, and it is a mere allegation not supported by any material or evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tnesses have signed, namely Shri Sushil Kankariya s/o Shri P.M. Kankariya and Shri Rajeev s/o Shri H.M. Ghatak. However, the learned counsel for the respondent was unable to provide copy of the so-called affidavit, which appeared to have been placed before the Dy. Com. (Appeals) and the Tax Board, though the matter was adjourned for quite number of times and today also when the matter was heard after the record was summoned, the learned counsel for assessee was unable to place on record the so-called affidavit. 8. Be that as it may, in my view the Dy. Com. (Appeals) ought not to have accepted such an affidavit without providing a chance to the AO to comment upon such an affidavit. Any additional evidence placed at the appellate stage is required to be sent for comments of the AO and in my view the Tax Board also ought not to have considered the additional affidavit/evidence. 9. On perusal of the facts, it transpire that a show cause notice was given to the assessee respondent on 28.10.2002 for hearing on 7.11.2002, however, as pointed out earlier the assessee himself requested that he is not able to explain the difference of stock to the extent of 2530 kg and the order may be pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most after an year and that too when the assessment proceedings were being taken up in November 1996. We may observe that retraction should be made as soon as possible and immediately after such a statement has been recorded, either by filing a complaint to the higher officials or otherwise brought to the notice of the higher officials, either by way of a duly sworn affidavit or statements supported by convincing evidence through which an assessee could demonstrate that the statements initially recorded were under pressure/coercion and factually incorrect. In our view, retraction after a sufficient long gap or point of time, as in the instant case, looses its significance and is an afterthought. Once statements have been recorded on oath, duly signed, it has a great evidentiary value and it is normally presumed that whatever stated at the time of recording of statements under Section 132(4), are true and correct and brings out the correct picture, as by that time the assessee is uninfluenced by external agencies. Thus, whenever an assessee pleads that the statements have been obtained forcefully/by coercion/undue influence without material/contrary to the material, then it should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 132(4) of the Act on oath. However, the Tribunal held that retraction from the statement had to be at the earliest opportunity in the absence of which voluntary statement recorded in the presence of family members was an important material, which could be acted upon. The Punjab & Haryana High Court upheld the finding of the Tribunal, even when there was just a gap of less than 3 months. It would also be appropriate to quote relevant paras :- "6. It is not disputed that the statement was made by the assessee at the time of survey, which was retracted on May 28, 2003, and he did not take any further action for a period of more than two months. In such circumstances, the view taken by the Tribunal that retraction from the earlier statement was not permissible, is definitely a possible view. The mere fact that some entries were made in a diary could not be held to be sufficient and conclusive to hold that the statement earlier made was false. The assessee failed to produce books of account which may have been maintained during regular course of business or any other authentic contemporaneous evidence of agricultural income. In the circumstances, the statement of the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icious manner on the basis of the materials disclosed during the search under section 132 of the Incometax Act." 15.6 In the case of CIT v. O. Abdul Razak (supra), on the basis of seized documents recovered during search, addition was made with respect to purchase of lands on the strength of the admission made by the assessee regarding the actual amount paid as disclosed voluntarily in his sworn statement and the amounts disclosed in the cash flow statement corroborated by the recovery and seizure of title deeds. Personal expenses were estimated on the basis of the admission made again in the statement under Section 132(4) of the Act. Though the AO made addition, the Tribunal deleted the addition on the basis that apart from the statements, there was no other material and there was a retraction made by the assessee. However, the High Court taking into consideration that the statements recorded under Section 132(4) of the Act have a strong evidentiary value, observed ad infra :- "12. The Tribunal's finding that the statement recorded under section 132(4) has no evidentiary value, hence cannot be sustained. The reliance placed by the Tribunal on the retraction statement is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vis-à-vis the property transactions as also that made on account of personal expenditure has to be decided with reference to the answer in the first question, since both additions are on account of admissions made in section 132(4) statement corroborated by documents recovered in search and the attendant circumstances. The Tribunal placed much reliance on the retraction and even went to the extent of stating that it was the Department's burden to prove the retraction to be untrue by bringing in any corroborative, evidence. The Hon'ble Supreme Court has considered the question of burden of proof in the decision reported in CIT v. Best and Co. P. Ltd. [1966] 60 ITR 11 (SC); AIR 1966 SC 1325. 14. In the instant case, on the clearadmission of the assessee corroborated by the documents the burden on the Department ceases to exist. On the retraction being filed by the assessee, there is a burden cast on the assessee to prove the detraction or rather disprove the admissions made. It is not a shifting of the onus but a new burden cast on the assessee to disprove the earlier admissions having evidentiary value. As noticed earlier, retraction made by the assessee can only b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, where even the retraction was made within six days from the confession, held as under :- "3. It is true that the petitioner had confessed that he purchased the gold and had brought it. He admitted that he purchased the gold and converted it as a Kara. In this situation, bringing the gold without permission of the authority is in contravention of the Customs Duty Act and also FERA. When the petitioner seeks for cross-examination of the witnesses who have said that the recovery was made from the petitioner, necessarily an opportunity requires to be given for the crossexamination of the witnesses as regards the place at which recovery was made. Since the dispute concerns the confiscation of the jewellery, whether at conveyor belt or at the green channel, perhaps the witnesses were required to be called. But in view of confession made by him, it binds him and, therefore, in the facts and circumstances of this case the failure to give him the opportunity to cross-examine the witnesses is not violative of principle of natural justice. It is contended that the petitioner had retracted within six days from the confession. Therefore, he is entitled to cross-examine the panch witnes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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