RECORDING OF STATEMENT BY THE I T AUTHORITIES

It is often seen that in course of assessment proceedings or any other proceedings in Income Tax Act, the department of Income-tax used to record statement of the assessee or witnesses. Now, the question which is important, that, who can record the statement and how the statement can be recorded. Both the issues are very important in respect of recording of the statement. The Income-tax Act provides power for recording the statement to the Assessing Officer. In the section 116 of the Income-tax, the Income-tax authorities have been defined. As per the section 116 of the Income-tax, the Inspector is also falling under the definition of authorities.

First of all we have to understand the meaning of the statement. The statement means anything stated in writing or orally to communicate in any matter. The admission or confession are two different words and also having more or less the same gravity but used in different sense. The admission is admissible under section 21 of the Evidence Act as proof against the person making by and on their behalf. The admission is generally used in civil matters. The admission can be accepted or rejected or the part of the admission can be accepted. All the admissions are not confession. As provided, Taxpayer or the witnesses both have a right to treat that due courtesy during the recording of statement should be. A statement recorded under influence or otherwise has no evidentiary value. A deponent has the right to give statement only on the basis of his memory or with reference to some documents which had been written by him or had any opportunity to go through or otherwise. While giving the statement, the statement is made on the basis of memory the things should be elaborated as per memory but where the statement is made on the basis of any document; the fact should be clarified in course of statement and mentioned in the statement itself. The statement is a tool with the department so as to use against the assessee.

Precaution in course of recording statement

One deponent must be careful while recording the statement and try to state the true facts. After recording the statement, the statement should be signed on all the pages. Before signing the statement, the deponent must have gone through and pointed out the mistake if any, occurred in course of recording the statement. The facts should be incorporated related to subject. After signing the statement, copy thereof must be demanded.

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The section 131 and 132 (4) of the Income-tax Act, authorized the Income-Tax Officer so as to record the statement. None of the other sections authorizes the Assessing Officer so as to record the statement on oath.

Who can record the statement?

Now the question arises that who can record the statement.

As provided in the Act, the Income-tax Officer and above the rank of him are the competent so as to administer the oath and to record the statement. Though, section 116 of the Income-tax Act also having the name of the Inspector but the judicial pronouncements are in favour of the assessee, that statement can not be recorded by the Inspector.

In 29 IT Rep. Page 513 the Hon’ble Income-tax Appellate Tribunal, Delhi Bench, Delhi in case of Smt. Madhubala Vs. Income-tax Officer, Ward-4 Hissar held that in Income-tax Act, Inspector is not authorised so as to record the statement. In case of M/s Kamal & Co. vs. Assistant Commissioner of Income-tax, Jaipur, the Hon’ble Appellate Tribunal, Jaipur Bench, Jaipur is also of the same view reported in 21 T.W. 427.

About recording of statement

The statement can be recorded by administering oath, if recorded without oath is disputed matter. As far as the administering of oath, the competent person can only administer oaths as per the Indian Oath Act. The statement recorded on oath becomes binding, on its maker unless and otherwise, the deponent is retracted and the retraction must be supported by some causable admissible evidence, therefore the statement should be recorded by administering oath and the person who is recording the statement be competent. The section 3 of the Indian Oath Act is relevant, which is as under:

Section 3 of the Indian Oath Act, provides power to administer oath. The relevant provisions thereof are as under:

3. Power to administer oaths. (1) The following courts and persons shall have power to administer, by themselves or, subject to the provisions of sub-section (2) of section 6, by an officer empowered by them in this behalf, oaths and affirmations in discharge of the duties imposed or in exercise of the powers conferred upon them by law, namely:--

(a) all courts and persons having by law or consent of parties authority to receive evidence;

(b) the commanding officer of any military, naval, or air force

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station or ship occupied by the Armed Forces of the Union, provided that the oath or affirmation is administered within the limits of the station.

(2) Without prejudice to the powers conferred by sub-section (1) or by or under any other law for the time being in force, any court, Judge, Magistrate or person may administer oaths and affirmations for the purpose of affidavits, if empowered in this behalf-

(a)by the High Court, in respect of affidavits for the purpose of judicial proceedings; or(b) by the State Government, in respect of other affidavits.

Administration of oath

The administration of oath is one of the important ingredients for recording the statement. In course of the recording statement, Officer fails to administer the oath; in that case the statement recorded loses the character of binding nature as per various courts. The followings are the judicial pronouncements in respect of the administration of oath:

1. The Hon’ble Rajasthan High Court in judgment reported in 92 STC Page 629( Raj.) in case of C.T.O v/s M/s Kewalram Sumnomal Cavanduspur held that where the oath was not administered in that case the statement ,is no statement in the eye of law. The Hon’ble court held that if the statement were obtained and the officer has verified as read over and accepted by the assessee than the question of admission of the said statement could have been examined by the Sales Tax Tribunal . The mistake of the officer in not verifying the statement shows that the said statement was not accepted as a correct one and is not admissible in law. Though, the judgment is in respect of the sales-tax matters but principles laid down by the Hon’ble Court can be applied in other laws also.

2. In case of 214 CTR Page 589, the Hon’ble High Court of Madras in case of Commissioner of Income-tax Vs. S.K. Kadar Khan & Sons held that section 133 A of the Income-tax Act does not empower in IT authority to examine in person on oath, hence such statement is having no evidentiary value.

3. The Hon’ble High Court the case of Additional Commissioner of Income-tax, Bihar Vs. Hanuman Agriculture reported in 151 ITR Page 150, 42 CTR Page 15 took a view and held that section 131 (1) (b) empowers the authority but does not applies the revenue authorities concerned to administer the oath. The statement witnesses taken without administration of oath are equal administration of any evidence.

Language of the statement

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The language in which the statement has to be recorded by itself is also an important one as per the Indian Oath Act 1969; statement should be recorded in the language in which the deponent can understand. In practice, the statements are being taken in English language mostly. If by following strict interpretation, same is not in accordance with the oath Act but if where it is not possible to record the statement of the deponent, in his language, in that case the statement should be explained to the deponent in the language, known to him, in the presence of independence witness.

Presence of Independence Witness

The question whether the presence of independence witness is necessary, it is not always necessary that presence of independence witness during the course of recording statement is necessary, but where the statement (s) are/ is recorded in the presence of independence witness, the statement recorded bring more evidentiary value, in comparison to without presence. By signing of independent witness, is a certification of independent person.

Verification by mentioning read over and accepted

The recording officer, after recording of statement must write at the bottom or end of the statement as read over and accepted. The none mentioning of read over and accepted converted the statement as no statement in the eye of law as per the judgment of Rajasthan High Court, Jaipur Bench, in case of the Assistant Commissioner Taxes Officer Vs. Kishori Shyam Brijesh Kumar reported in 93 STC Page 213 (Raj.). The Hon’ble Court held that missing of read over and accepted over the signature the Hon’ble Court not accepted the statement as correct.

Copy of statement

The person examining is entitles to get copy of statement. One should ask for it and should request so as to supply the same. In case the authority fails to supply the statement he can not use that statement against deponent, therefore, this issue should be keep in mind.

Cross-Examination

A very important issue in respect of recording of statement and cross examination is that whether the opportunity of cross examination should be allowed or not in course of survey. The Hon’ble Rajasthan High Court in case of Rameshwar lal Mali Vs. CIT reported in 256 ITR Page 536 held that cross examination is not permitted because there is no provision for cross examination of the person whose statement is being recorded during the survey.

Statement made in ignorance.

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The statement made in ignorance of correct facts are not binding. The statement recorded threat or inducement is not valid. The deponent must be taken care to retract the statement recorded on account of ignorance or inducement, without any delay because the time is the important essence.

Evidentiary value of the statement recorded under section 132 (4) of the Income-tax Act

The Statement recorded under section 132 (4) of the Income-tax Act is the only statement having the binding force upon the assessee. It does not mean that other statements recorded by the authorized authorities are no statement in the eye of law or having no binding force but as per various judicial pronouncements the same are having not that much importance as in section 132 (4) of the Income-tax Act.

The section 132 (4) of the Income-tax Act provides for recording of statement so recorded under section 132 (4) of the Income-tax Act by administering oath, is having the character of binding nature.

The case reported in 37 ITR Page 461 Laxmi Co.Vs Commissioner of Income-Tax, UP & VP should be taken in to consideration, in this, it has been case Held that the provisions of Evidence Act are not applicable in Income-Tax Act. Therefore, this judgment is also a judgment should be kept it in mind.

Now the next question germin is whether the statement recorded during the course of survey can be made basis for making addition?

This question was examined by the Income-tax Appellate Tribunal Kolkata Bench in the case of CIT vs. Satyanarayan Agarwal 255 ITR 69 (Kol) (AT). The Tribunal held that the only occasion when the assessee’s own statement can be used as evidence against himself, is the statement recorded u/s.132(4), during the course of search and seizure operations, and by virtue of specific legal provision to this effect in the section 132(4) itself.

I have mentioned number of citation in the article but while applying the judgment, fact should be verified first, so as to apply the ratio of judgment.

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