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TMI Blog2023 (10) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the presumption and proceeded accordingly. Now, the drawing of a presumption by the assessing officer in terms of Section 292C, in our opinion, is based on assessment of facts and discretionary and should not ordinarily be interfered with by an appellate authority. Once this presumption had been made, the onus squarely shifted to the respondent assessee to disprove those facts. The tribunal was enjoined with a duty to appreciate this law and to examine whether the assessee had been able to discharge the burden. Now, look at the reasons given by the tribunal. It cast a duty on the Revenue to prove the handwriting of the assessee. It accepted the contention of the assessee that the documents did not belong to him instead of requiring him to prove it. It allowed the assessee to retract the admission made by him during the course of the proceedings, by a statement dated 9th March, 1999 that the trial balance for the period 1st April, 1997 to 31st March, 1998 summarizes my entire business operation for 1997-1998 . Since Income Tax officers are not police officials, the view of the Supreme Court in Surjeet Singh Chhabra vs. Union of India and Ors. [ 1996 (10) TMI 106 - SUPREME COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mr. Riddhiman Mukherjee, Mr. Ashok Kr. Singh. JUDGMENT I. P. MUKERJI, J.:- This is an appeal under Section 260A of the Income Tax Act, 1961. Such an appeal is admissible and can be heard only if a substantial question of law is involved. If the adjudication of facts by the lower adjudicating authority is such as to render the decision perverse or most unreasonable, a substantial question of law is said to arise from the said order. On 30th September, 2019 this appeal was admitted to be heard on the following substantial questions of law: I. Whether on the facts and in the circumstances of the case, the findings of facts and the appraisal of evidence by the tribunal leading to the deletion of the addition of Rs. 3,25,37,586/- and Rs. 17,29,25,670/- as referred to in paragraph 4(i) and (ii) of the stay petition were perverse? II. Whether on the ground the order of the tribunal with respect to the said issue should be set aside? Thereafter paper-books were filed and the appeal became ready for hearing. On 15th September, 2023, when this appeal was called on for hearing, Mr. J. P. Khaitan learned Senior Advocate appearing for the respondent pointed out to this court that apparently t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some undisclosed transactions. These loose papers were examined and compared with the regular books of accounts. It was found that the respondent assessee did not consider page Nos. 4 to 14 of the loose bunch PP/37 and page Nos. 19 to 21 of the loose bunch No. PP/38 in those books of account. The assessing officer recorded that in spite of diverse opportunities the respondent assessee did not come forward to explain those documents. Before the assessing officer the assessee denied that he had anything to do with the loose papers. The assessing officer did not accept the assessee s computation of undisclosed income. The next issue relates to trial balance allegedly reflected by eleven pages of seized papers marked as PP 37. Apparently in his statement dated 9th March, 2019 the respondent assessee had stated that those pages denoted the trial balance for the period of 01.04.1997 to 31.03.1998 and that it summarized his entire business operation for 1997-98. Subsequently he retracted from the statement by his letter dated 20th March, 2021 stating that it was a test trial balance of imaginary figures . His explanation was that he was in the process of digitalizing his accounts, was pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets were found. The tribunal also observed that the assessing officer had laid too much emphasis on the presumption under Section 132(4A) of the said Act. The assessee had also preferred an appeal before the tribunal on some grounds. The appeal of the department was dismissed and that of the assessee was partly allowed. To decide this appeal, consideration of Section 132(4A) of which so much reliance has been placed by the adjudicating authorities becomes very germane. It may be pointed out that this section was inserted into the statute book by the Taxation Laws (Amendment) Act, 1975 with effect from 1st October, 1975. Mr. Khaitan showed us Section 292C of the Act which was inserted under the Miscellaneous Chapter XXIII of the Act by the Finance Act, 2007 with effect from 1st October, 1975. Now, the text of Section 292C substantially includes Section 132(4A) with some addition. We shall refer to Section 292C which is set out below:- 292C. Presumption as to assets, books of account, etc.- [(1)] Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. In this sense such presumption is also rebuttable. Conclusive proof gives an artificial probative effect by the law to certain facts. No evidence is allowed to be produced with a view to combating that effect. In this sense, this is irrebuttable presumption. The words in sub-section (4) are may be presumed . The presumption under sub-section (4-A), therefore, is a rebuttable presumption. The finding recorded by the High Court in the impugned judgment that the presumption under sub-section (4-A) is a irrebuttable presumption in so far as it relates to the passing of an order under sub-section (5) of Section 132 and rebuttable presumption for the purpose of framing a regular assessment is not correct. There is nothing either in Section 132 or any other provisions of the Act which could warrant such an inference or finding. This dictum was followed by a division bench of our court in Principal Commissioner of Income-tax, Central-1, Kol. Vs. Ajanta Footcare (India) (P.) Ltd. reported in (2017) 84 taxmann.com 109 (Calcutta). Learned counsel said that on the basis of the above facts the assessing officer ought not to have made the presumption and that the CIT appeal and the tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o establish that the admission made in the statement at the time of survey was wrong and in fact there was no additional income . Since Income Tax officers are not police officials, the view of the Supreme Court in Surjeet Singh Chhabra vs. Union of India and Ors. reported in (1997) 1 SCC 508 that even if a confession was retracted it was to be taken as an admission and binding on the maker is very relevant in this case. The tribunal ought not to have disregarded the admission merely on the ground that later on the assessee had withdrawn the admission, without scrupulously examining whether there were any substantial grounds enabling the assessee to resile from such admission. In those circumstances, the order of the tribunal with regard to the above issues is set aside. We remand the matter back to the tribunal with a direction upon it to reexamine the same on the basis of evidence on record by a detailed order within six months of communication of this order. The appeal is disposed of accordingly. Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (I. P. MUKERJI, J.) BISWAROOP CHOWDHURY, J.:- I have peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uttal evidence from the side of the assessee on this score at all. Learned Advocate also submits that when the Commissioner of Income Tax(A) had disbelieved the assessee s version completely there was no reason for the Commissioner of Income Tax(A) to discard the presumption drawn by the AO in terms of Section 132(4A) of the 4 Income Tax Act 1961. Much is submitted on the admission made by respondent/assesse. Before placing any reliance on the admission of the assessee it would have been just and reasonable on the part of assessing officer to ascertain as to whether the admission made by assessee before DDIT on 09-03-1999 was voluntary or not. Secondly it should have ascertained as to the contends of the documents/account papers which are seized by the Authority, whether those are within knowledge of the respondent Although it is not the requirement of law but it is an act of prudence on the part of the Income Tax Authority and shows reasonableness and bona-fide. It is not unusual that when a raid takes place in an establishment or house of an assessee, the assessee out of confusion and stress may make many statements in haste in order to complete the interrogation process. However ..... X X X X Extracts X X X X X X X X Extracts X X X X
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