Page 5 - DTPA Journal December 21
P. 5
e Journal
eJournal
Nov. - Dec., 2021
USEFUL POINTS IF A STATEMENT MADE
DURING SEARCH IS TO BE RETRACTED
Narayan Jain, LL.M., Advocate
A confessional statement admitting extra income Institute of Chartered Accountants of India
during search, may be retracted. However, one v Mukesh R. Shah [2004] 134 Taxman 265
should be cautious on following points to make the (Guj) the Court held that it goes without
retraction successful. saying that a retraction made after a
considerable length of time, would not
1. The Retraction must be made without
delay: Kantilal C. Shah v. ACIT [2011] 133 have the same efficacy in law as a
ITD 57 (Ahd) held that retraction of retraction made at the earliest point of
statement made u/s 132(4) will not be time from the day of admission. A
permissible if it has been made after a belated retraction would fall in the
lapse of considerable time and not done category of afterthought instead of being
immediately. In this case, after a lapse of retraction.
around 9 months through an Affidavit,and 3. Evidences to corroborate reasons for
the said retraction was submitted before the retraction:
AO with a covering letter after 50 days of a) Sudharshan P. Amin v. Asst. CIT [2013]
its retraction. According to department's 35 taxmann.com 370 (Gujarat): In
pleadings the said delay thus demonstrated search, assessee had disclosed a sum
that the assessee was not confident about as undeclared income. However,
filing of the retraction. There must be during assessment proceedings,
some convincing and effective evidence
assessee retracted from his
in the hands of the assessee through statement. Assessee's CA who was
which he could demonstrate that the said present at time of confessional
statement was factually incorrect. statements did not suggest any undue
Further there should also be some strong pressure or allurement by
evidence to demonstrate that the earlier department. It was held that
statement recorded was under coercion. In retraction made by assessee could
the present case, it was held that the
not be accepted and addition should
retraction is general in nature and be made to his income as undeclared
lacking any supportive evidence, rather investment. When retracting a
assessee took several months to retract
statement made on oath under section
the initial statement, which by itself 132(4), it should always be supported
created a serious doubt.
by effective evidence which shows that
2. A belated retraction would fall in the the statement which was earlier
category of afterthought: In Council of recorded was incorrect on facts or was
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