Kottakkal Wood Complex vs. DCIT (Kerala High Court)

(i) It is a fact that the statement under Section 133A of Sri. V. Ahammed, the salesman of the appellant, was recorded during the survey conducted. It is also true that an assessment made entirely relying on such a statement cannot be sustained. Law in this behalf has been clarified by this Court in Paul Mathews and Sons v. Commissioner of Income Tax 263 ITR 101, wherein this Court has held thus:

“Section 133A(3)(iii) enables the authority to record the statement of any person which may be useful for, or relevant to, any proceeding under the Act. Section 133A, however, enables the income-tax authority only to record any statement of any person which may be useful, but does not authorize taking any sworn statement. On the other hand, we find that such a power to examine a person on oath is specifically conferred on the authorised officer only under Section 132(4) of the Income-tax Act in the course of any search or seizure. Thus, the Income-tax Act, whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas section 133A does not empower any Income-tax Officer to examine any person on oath. Thus, in contradistinction to the power under Section 133A, Section 132(4) of the Income-tax Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under Section 133A of the Income-tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. Therefore, there is much force in the argument of learned counsel for the appellant that the statement elicited during the survey operation has not evidentiary value and the Income-tax Officer was well aware of this.”

(ii) The judgment in Paul Mathews 263 ITR 101 was relied on by the Madras High Court in Commissioner of Income Tax v. S. Khader Khan Son [2008] 300 ITR 157 (Mad). The judgment of the Madras High Court was confirmed by the Apex Court in Commissioner of Income Tax v. S. Khader Khan Son [2013] 352 ITR 480 (SC) by dismissing the appeal filed by the Revenue.

(iii) However, insofar as this case is concerned the assessments made is not based only on the statement under Section 133A of the Act. On the other hand, the assessment order itself reveals that the Revenue has placed reliance on the proceedings initiated against the appellant for imposition of penalty under Section 67 of the KVAT Act based on an inspection held on 17.08.2006. It is seen that the Revenue relied on letter dated 18.09.2007 issued by V. Ahammed to the Assistant Director of Income Tax (Investigation) clarifying his statement under Section 133A of the Act. This shows that the maker of the statement himself has re-affirmed the statement and nothing has been produced by the assessee to show that the contents of the statement are incorrect. In such a situation, we cannot accept the contention now raised by the learned counsel for the assessee and hold the assessments to be illegal.