Distinction between statements us 132(4) and 133A explained by Delhi High Court

Distinction between statements us 132(4) and 133A explained by Delhi High Court. Quashing of reopening of concluded assessments of earlier AYs upheld

ABCAUS Case Law Citation:
ABCAUS 1264 (2017) (05) HC

The Issue:
The main contention of the appellant Revenue was that the decision of the Division Bench as regards the assumption of jurisdiction under Section 153A of the Act required reconsideration, particularly in light of a later decision of a coordinate Bench of the High Court. According to revenue, the invocation of Section 153A of the Act to re-open concluded assessments of the AYs earlier to the year of search is justified even in the absence of incriminating material found during the search qua each such earlier Assessment Years.

Important Case Laws Cited/relied upon:
Commissioner of Income Tax (Central-III) v. Kabul Chawla
Smt. Dayawanti Gupta v. CIT
Paul Mathews & Sons v. Commissioner of Income Tax
CIT v. Dhingra Metal Works
CIT v. S. Khader Khan Son

Observations made by the High Court:

Distinction between statements us 132(4) and 133A

The main plank of submission of the Revenue was was that the disclosure made by the employee of in his statement u/s 133A was sufficient to be construed as incriminating material qua all the AYs, the assessment for which could be re-opened by invoking Section 153A of the Act.

The Hon’ble High Court noted that the Revenue, in the written submission, had termed the said statement as the statement recorded under Section 132(4) of the Act. The Hon’ble High Court observed that the statement was in fact not under Section 132(4) of the Act but under Section 133A of the Act. There is a difference between a statement made during a survey under Section 133A of the Act and that made during the course of search under Section 132 (4) of the Act. Section 132(4) of the Act states that the authorized officer may, during the course of search and seizure, “examine on oath any person who is found to be in possession or control of any books of account, documents, monies, bullion, jewellery…”and that any statement made during such examination may be used thereafter in evidence in any proceeding under the Act. On the other hand, Section 133A does not talk of the recording of any statement on oath. Under Section 133A (3) (iii), the Income Tax Authority acting under the said provision could “record the statement of any person which may be useful for, or relevant to, any proceeding under this Act.” Therefore, there is a considerable difference in the nature of the statement recorded under Section 132(4) and that recorded under Section 133A(3)(iii) of the Act

It was further observed by the Hon’ble High Court that following the Madras High Court judgment it had previously held that the word “may” occurring in Section 133A(3)(iii) of the Act “clarifies beyond doubt that the material collected and the statement recorded during the survey is not a conclusive piece of evidence by itself.”

It was also noted that the decision of the Madras High Court had been affirmed by the Supreme Court by dismissing the Revenue’s SLP. Also, The CBDT instructions dated 10th March, 2003 and 18th December, 2014 also emphasized that there should be no recording of statement during “search/seizure/other proceeding” under the Act under “undue pressure or coercion”.

Thus the Hon’ble High Court opined that it would be wrong on the part of the Revenue to characterize the statement u/s 133A as by itself an incriminating material that could be used for making additions in all the AYs in question apart from the year of search.