SHAILESH GOYAL,TONK vs. ACIT, CENTRE CIRCLE JAIPUR, JAIPUR

PER GAGAN GOYAL, A.M:

This appeal, by assessee is directed against the order of CIA(A)-04, Jaipur dated 16.02.2024 passed u/s. 250of the Income Tax Act, 1961 (in short ‘the Act’).
The assessee has raised the following grounds of appeal: -

evidence carried no evidentiary value as per Evidence Act. Thus, the addition so made deserves to be deleted summarily.
1.1 The Id. CIT(A) has grossly erred in upholding the addition made solely on the basis of surrender made during survey proceedings without any corroborative evidence.
1.2 The Id. CIT(A) had grossly erred in appreciating the fact, surrender made during the survey by the assessee was retracted by him subsequently.
1.3 The Id. CIT(A) had grossly erred in completely ignoring the fact, that confession of additional income of Rs. 1,00,00,000/- made duringthe survey proceedings by the assessee was under force, coercion and compulsion.
2. On the facts and in the circumstances of the case, the learned CIT(A) has legally and factually erred in making an addition of Rs. 26,34,939/- as undisclosed income on the basis rough jotting noted in the contention of the appellant made with regard to such jottings. Thus, the addition so made deserves to be deleted summarily.
3. On the facts and in the circumstances of the case, the learned CIT(A) has legally and factually erred in making an addition of Rs. 1,50,000/- u/s 69C r.w.s. 115BBE of the Act on the basis rough jotting noted in the impounded papers without appreciation the contention of the appellant made with regard to such jottings. Thus, the addition so made deserves to be deleted summarily.
4. On the facts and in the circumstances of the case, the learned CIT(A) has legally and factually erred in upholding the action of ld. AO of initiating penalty proceedings u/s 271(1)(c) of the Act against the assessee in a mechanical manner as the appellant did not furnish any inaccurate particulars of income.
5. The appellant craves right to add, amend and alter the grounds on or before the hearing.

(b) any place occupied by any person in respect of whom he exercises juri iction, or (c) any place in respect of which he is authorised for the purposes of this section by such income-tax authority, who is assigned the area within which such place is situated or who exercises juri iction in respect of any person occupying such place, at which a business or profession or an activity for charitable purpose is carried on, whether such place be the principal place or not of such business or profession or of such activity for charitable purpose, and require any proprietor, trustee, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession or such activity for charitable purpose-
(i) to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place,
(ii) to afford him the necessary facility to check or verify the cash, stock or other valuable article or thing which may be found therein, and (iii) to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act.

Explanation.-For the purposes of this sub-section, a place where a business or profession or activity for charitable purpose is carried on shall also include any other place, whether any business or profession or activity for charitable purpose is carried on therein or not, in which the person carrying on the business or profession or activity for charitable purpose states that any of his books of account or other documents or any part of his cash or stock or other valuable article or thing relating to his business or profession or activity for charitable purpose are or is kept.
(2) An income-tax authority may enter any place of business or profession referred to in sub- section (1) only during the hours at which such place is open for the conduct of business or profession and, in the case of any other place, only after sunrise and before sunset.
(2A) Without prejudice to the provisions of sub-section (1), an income-tax authority acting under this sub-section may for the purpose of verifying that tax has been deducted or collected at source in accordance with the provisions under sub-heading B of Chapter XVII or under sub- heading BB of Chapter XVII, as the case may be, enter, after sunrise and before sunset, any office, or any other place where business or profession is carried on, within the limits of the area assigned to him, or any place in respect of which he is authorised for the purposes of this section by such income-tax authority who is assigned the area within which such place is situated, where books of account or documents are kept and require the deductor or the collector or any other person who may at that time and place be attending in any manner to such work,-
(i) to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place, and (ii) to furnish such information as he may require in relation to such matter.]

(3) An income-tax authority acting under this section may, -
(i) if he so deems necessary, place marks of identification on the books of account or other documents inspected by him and make or cause to be made extracts or copies therefrom,
(ia) impound and retain in his custody for such period as he thinks fit any books of account or other documents inspected by him:

Provided that such income-tax authority shall not-
(a) impound any books of account or other documents except after recording his reasons for so doing; or (b) retain in his custody any such books of account or other documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director
General or the Principal Commissioner or the Commissioner or the Principal Director or the Director therefor, as the case may be,
(ii) make an inventory of any cash, stock or other valuable article or thing checked or verified by him,
(iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act:

Provided that no action under clause (ia) or clause (ii) shall be taken by an income-tax authority acting under sub-section (2A).
(4) An income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein he has entered, any cash, stock or other valuable article or thing.
(5) Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the income-tax authority is of the opinion that it is necessary or expedient so to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who, in the opinion of the income-tax authority, is likely to possess information as respects the expenditure incurred, to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act and may have the statements of the assessee or any other person recorded and any statement so recorded may thereafter be used in evidence in any proceeding under this Act.
(6) If a person under this section is required to afford facility to the income-tax authority to inspect books of account or other documents or to check or verify any cash, stock or other valuable article or thing or to furnish any information or to have his statement recorded either refuses or evades to do so, the income-tax authority shall have all the powers under sub-section (1) of section 131for enforcing compliance with the requirement made :
Provided that no action under this section shall be taken by an income-tax authority without the approval of the Principal Director General or the Director General or the Principal Chief
Commissioner or the Chief Commissioner.
Explanation. -In this section, -
(a)
“Income-tax authority” means-
(i) a Principal Commissioner or Commissioner, a Principal Director or Director, a Joint Commissioner or Joint Director, an Assistant Director or a Deputy Director or an Assessing Officer, or a Tax Recovery Officer; and (ii) includes an Inspector of Income-tax, for the purposes of clause (i) of sub-section (1), clause (i) of sub-section (3) and sub-section (5), who is subordinate to the Principal Director General or the Director General or the Principal Chief Commissioner or the Chief Commissioner, as may be specified by the Board;

(b)
“proceeding” means any proceeding under this Act in respect of any year which may be pending on the date on which the powers under this section are exercised or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.]

Section - 132, Income-tax Act, 1961 - FA, 2025
Search and seizure.
132. (1) Where the Principal Director General or Director General or Principal Director orDirector or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioneror Additional Director or Additional Commissioneror Joint Director or Joint
Commissioner in consequence of information in his possession, has reason to believe that-
(a) any person to whom a summons under sub-section (1) of section 37 of the Indian
Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian
Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act
(hereinafter in this section referred to as the undisclosed income or property), then, -

(A) the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional
Commissioner orJoint Director, Joint Commissioner, Assistant Director or Deputy
Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Additional Director or Additional Commissioner orJoint Director, or Joint
Commissioner, as the case may be, may authorise any Assistant Director or Deputy
Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer,
(the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-
(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept;
(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available;
(iia) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;
(iib) require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000), to afford the authorised officer the necessary facility to inspect such books of account or other documents;
(iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search:

Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business;
(iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom;

(v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing:
Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of juri iction of any Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, but such Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner has no juri iction over the person referred to in clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in section 120, it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner having juri iction over such person may be prejudicial to the interests of the revenue :
Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii):
Provided also that nothing contained in the second proviso shall apply in case of any valuable article or thing, being stock-in-trade of the business:
Provided also that no authorisation shall be issued by the Additional Director or Additional
Commissioner or Joint Director or Joint Commissioner on or after the 1st day of October, 2009
unless he has been empowered by the Board to do so.
Explanation. -For the removal of doubts, it is hereby declared that the reason to believe, as recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.
(1A) Where any Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, in consequence of information in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the Principal Director General or Director General or Principal Director orDirector or any other Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioneror Joint Director or Joint Commissioner to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1), such Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or Commissioner may, notwithstanding anything contained in section 120, authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft.
Explanation. -For the removal of doubts, it is hereby declared that the reason to suspect, as recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.
(2) The authorised officer may requisition the services of, -
(i) any police officer or of any officer of the Central Government, or of both; or (ii) any person or entity as may be approved by the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director General, in accordance with the procedure, as may be prescribed, in this regard, to assist him for all or any of the purposes specified in sub-section (1) or sub-section (1A) and it shall be the duty of every such officer or person or entity to comply with such requisition.
(3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section.
Explanation. -For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1).
(4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.
Explanation.-For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian
Income-tax Act, 1922 (11 of 1922), or under this Act.
(4A) 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 a search, it may be presumed-
(i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;
(ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.]
(5) [***]
(6) [***]
(7) [***]
(8) The books of account or other documents seized under sub-section (1) or sub-section (1A) shall not be retained by the authorised officer for a period exceeding one month from the end of the quarter in which the order of assessment or reassessment or recomputation is made under sub-section (3) of section 143 or section 144 or section 147 orsection 153A or clause (c) of section 158BC unless the reasons for retaining the same are recorded by him in writing and the approval of the Principal Chief Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal Director General or Director General or Principal Director or Director for such retention is obtained :
Provided that the Principal Chief Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal Director General or Director General or Principal Director or Director shall not authorise the retention of the books of account and other documents for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed.

(8A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order.
(9) The person from whose custody any books of account or other documents are seized under sub-section (1) or sub-section (1A) may make copies thereof, or take extracts therefrom, in the presence of the authorised officer or any other person empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf.
(9A) Where the authorised officer has no juri iction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) seized under that sub-section shall be handed over by the authorised officer to the Assessing Officer having juri iction over such person within a period of sixty days from the date on which the last of the authorisations for search was executed and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Assessing Officer.
(9B) Where, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, the authorised officer, for reasons to be recorded in writing, is satisfied that for the purpose of protecting the interest of revenue, it is necessary so to do, he may with the previous approval of the Principal Director
General or Director General or the Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee, and for the said purposes, the provisions of the Second Schedule shall, mutatis mutandis, apply.
(9C) Every provisional attachment made under sub-section (9B) shall cease to have effect after the expiry of a period of six months from the date of the order referred to in sub-section (9B).
(9D) The authorised officer may, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, make a reference to, -
(i) a Valuation Officer referred to in section 142A; or (ii) any other person or entity or any valuer registered by or under any law for the time being in force, as may be approved by the Principal Chief Commissioner or the Chief
Commissioner or the Principal Director General or the Director General, in accordance with the procedure, as may be prescribed, in this regard, who shall estimate the fair market value of the property in the manner as may be prescribed, and submit a report of the estimate to the authorised officer or the Assessing Officer, as the case may be, within a period of sixty days from the date of receipt of such reference.
(10) If a person legally entitled to the books of account or other documents seized under sub- section (1) or sub-section (1A) objects for any reason to the approval given by the Principal Chief
Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal
Director General or Director General or Principal Director or Director under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents and the Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit.
(11) [***]
(11A) [***]
(12) [***]
(13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under sub-section (1) or sub- section (1A).
(14) The Board may make rules in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer-
(i) for obtaining ingress into any building, place, vessel, vehicle or aircraft] to be searched where free ingress thereto is not available;
(ii) for ensuring safe custody of any books of account or other documents or assets seized.
[Explanation 1.-For the purposes of sub-sections (9A), (9B) and (9D), the last ofauthorisations for search shall be deemed to have been executed, -
(a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; or (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer.

Explanation 2.-In this section, the word “proceeding” means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.
5. Section 132 of the Act with its sub-section, namely (4), (4A) and (13) specifically empowers the Revenue with special authority as mentioned (supra) and looking at the facts of the matter, certainly survey conducted in this matter u/s. 133A of the Act should have been converted into search u/s. 132 of the Act.
As a matter of record, survey operations in this case was carried out/ started on the business premises of the assessee on 10.12.2015 and the same was concluded after two days i.e. on 12.12.2015 at 4.00 AM( in the morning). This fact is not under challenge and rather confirms that the survey team either intentionally or in absence of knowledge of provisions of the section 1333A of the Act, reacting and working as if they were under search operation as prescribed in section 132(4)/(4A)/ (13) of the Act.
6. Rather, this exercise of the survey team defeated the purpose of whole exercise, as they started the operations u/s. 133A of the Act, but reacted and tried to get the results as prescribed in section 132 of the Act. If the same exercise would have been done in section 132 of the Act, the assessee would not have been in the position to simply deny the statement obtained and the piece of evidences collected. The assessee relied upon the following judicial pronouncements by the Hon’ble Apex Court in his favour to deal with various aspects involved in the matter as under:
[2012] 25 taxmann.com 413 (SC)CIT, Salemvs.S. Khader Khan Son

“In the instant case, there was a survey operation conducted under section 133A of the Act in the assessee's premises and a statement was recorded from one of the partners. Assuming there-were discrepancies and irregularities in the books of account maintained by the assessee, an offer of additional income for the respective assessment years was made by the partner of the firm. But, such statement, in view of the scope and ambit of the materials collected during the course of survey action under section 133A shall not have any evidentiary value, as rightly held by the Commissioner and the Tribunal since such statement was not attached to the provisions of section 133A of the Act. It could not be said solely on the basis of the statement given by one of the partners of the assessee-firm mat the disclosed income was assessable as lawful income of the assessee. Since there was no material on record to prove the existence of such disclosed income or earning of such income in the hands of the assessee, it could not be said that the Revenue had lost lawful tax payable by the assessee.
In the decision in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18, the apex court held mat an admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect.
Where a survey was conducted in the premises of the assessee, a medical practitioner, and a statement was recorded from him, in which the assessee surrendered additional income and pursuant to the same, the Assessing Officer reopened the assessment, but during the course of which the assessee retracted the additional income offered and contended that the statement was the result of duress, which was not accepted by the Assessing Officer and also by the Tribunal holding that the statement is valid and that it was made without duress, a Division
Bench of the Allahabad High Court in Dr. S.C. Gupta v. CIT [2001] 248 ITR 782 (All), of course, placing reliance on the decision of the apex court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 held that the burden that was laid on the assessee to establish that the admission made in the statement at the time of survey was wrong and that there was no additional income was not even attempted to be discharged and thus, the order of the Tribunal was based on facts and no question of law arose from it.
A power to examine a person on oath is specifically conferred on the authorities only under section 132(4) of the 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, has expressly provided for it, 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 recorded under section 133A of the Act is not given an evidentiary value, vide a decision of the Kerala High Court in Paul
Mathews and Sons v. CIT [2003] 263 ITR 101. The scope of sections 132(4) and 133A also came up for consideration before the Kerala High
Court in Paul Mathews and Sons v. CIT [2003] 263 ITR 101. In the said case, the assessee therein made an attempt to draw a distinction between the two provisions, viz., sections 132(4) and 133A. According to the assessee, there is no provision to administer oath or to take any sworn statement and that a mere admission or an acquiescence cannot be a foundation for an assessment and that any statement given during a survey has no effect as an "admission" nor can it be a statement on oath. According to the assessee, his statement during the survey with reference to any books of account cart hardly be the basis for any assessment. It was also contended on behalf of the assessee that any material collected or any statement recorded during the survey under section 133A cannot be put against the assessee, as the same has no evidentiary value. The Division Bench of the Kerala High Court, appreciating the stand taken by the assessee and after referring to section 133A of the Act, held as here- under (page 108):
"... 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, the statement elicited during the survey operation has no evidentiary value and the Income-tax Officer was well aware of this. (emphasis supplied)
Similarly, when the issue, whether the expression "such other materials or information as are available with the Assessing Officer in section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under section 133A, came up for consideration before this court in CIT v. G. JCSenniappan [2006] 284 ITR 220, a Division Bench of this court, in which one of us was a party (P.P.S. Janarthana Raja J.), answered the question in the affirmative, against the Revenue and in favour of the assessee, holding that the materials collected during the survey under section 133A cannot be taken into consideration while determining the undisclosed income in respect of block assessment as per section 158BB, as the same has no evidentiary value.

Again, when an identical question whether the material found in the course of survey in the premises of the builder could be used in the block assessment of the assessee, came up for consideration before this Division Bench in an unreported case in T. C (A) No. 2620 of 2006, this court, by order dated November 22, 2006—since reported in CIT v. S. Ajit Kumar [2008] 300 ITR
152, of course, following the, earlier decision of this court in G.K. Senniappan's case reported in [2006] 284 ITR 220, while confirming the order of the Tribunal, answered the question in favour of the assessee, in limine.
From the foregoing discussion, the following principles can be culled out:
(i)
An admission is an extremely important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of account do not correctly disclose the correct state of facts, vide decision of the apex court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 ;
(ii)
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 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, vide Paul Mathews and Sons v. CIT [2003] 263 ITR 101 (Ker.);
(iii)
The expression "such other materials or Information as are available with the Assessing
Officer" contained in section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under section 133A, vide CIT v. G. K.
Senniappan [2006] 284 ITR 220 (Mad.);
(iv)
The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment, vide decision of this court in T. C
(A) No. 2620 of 2006 (between CIT v. S. Ajit Kumar [2008] 300 ITR 152 (Mad.);
(v)
Finally, the word "may" used in section 133A(3)(iii) of the Act, viz., "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act", as already extracted above, makes it clear that the materials collected and the statement recorded during the survey under section 133A are not conclusive piece of evidence by itself.
For all these reasons, particularly, when the Commissioner and the Tribunal followed the circular of the Central Board of Direct Taxes dated March 10, 2003, extracted above, for arriving at the conclusion that the materials collected and the statement, obtained under section 133A would notautomatically bind upon the assesses we do not see any reason to interfere with the order of the Tribunal.
Accordingly, rendering no substantial question of law arises for consideration, the tax case appeal stands dismissed.”
7. In view of the above, it is observed that the Revenue solely relied upon the statement of the assessee (which has no evidentiary value in the scheme of survey as provided in section 133A of the Act) without verifying or cross-checking the contents of the confessional statement from third parties such as purchasers, sellers, alleged partners or investors etc. The fate of this statement would have been different, if the same would have been recorded during the proceedings u/s.
132 of the Act. Considering the facts of the matter and relying on the legal position as discussed (supra), we are of the firm view that whole exercise of survey carried u/s. 133A of the Act was void without any legal force. Hence, statement recorded were also of no use to the Revenue and addition of Rs. 1 Cr.
made (based on this statement without authority of law is not sustainable and the whole exercise of survey declared to be illegal), deleted. The AO is directed to delete the addition of Rs. 1 Cr. made and further confirmed by the Ld. CIT(A).
8. As far as addition of Rs. 26,34,939/- is concerned, it is also connected to Amber Nagar Scheme (which was never established by the Revenue) without any proof that the scheme was ever launched. The whole addition was based on an assumption that the Amber Nagar Scheme solely owned and operated by the appellant without any supporting evidence. The authorities below relied upon 19

rough jottings impounded as business receipts, although the papers being unsigned, undated, vague and lacks any corroborative details. Again, this exercise if would have been done in section 132 of the Act, the fate of the matter would have been different and onus to prove otherwise also would have been shifted to the assessee. In the present proceedings carried out u/s. 133A of the Act, these documents will be categorised as “Deaf and Dumb” documents only, without evidentiary value. We have gone through the orders of authorities below, but they failed to establish any corroborative evidence against the assessee. In the light of discussion above and relying on the land mark decision of the Hon’ble
Apex Court in the case K.P. Varghese vs. ITO [1981] 131 ITR 597 (SC), without any hesitation, we hold that addition based on Deaf and Dumb documents are not sustainable, and as such addition made by the AO and further confirmed by the Ld. CIT(A) is directed to be deleted.
9. In the result, appeal of the assessee is allowed in above terms.
The Order is pronounced in the open court on the 29th day of July 2025. (NARINDER KUMAR)
ACCOUNTANT MEMBER
Jaipur, िदनांक/Dated: 29/07/2025

Copy of the Order forwarded to:
1. अपीलाथ /The Appellant ,
2. ितवादी/ The Respondent.
3. आयकर आयु CIT
4. िवभागीय ितिनिध, आय.अपी.अिध., Sr.DR., ITAT,
5. गाड फाइल/Guard file.

BY ORDER,
////
(Asstt.