Explore the impact of oath in Income Tax proceedings under the Income-tax Act, 1961. Understand the nuances, format, authority to administer, and consequences of oath in statements. Learn about the evidentiary value, validity, and retractions of statements given under oath. Stay informed on the legal aspects to ensure compliance and navigate tax proceedings effectively.
Income-tax Act, 1961 empowers various Income-tax Authorities to record statements. The Act does not lay down the procedure of recording. Some sections like 131, 132(4) etc., say that the statement recorded should be under oath; whereas some other sections like 133A, simply refer to statements without mentioning the term, ‘oath’. Obviously, this has led to number of litigations. Several questions also arise. Is it necessary to administer oath every time a statement is recorded? If a statement is recorded without oath, is it valid? What is the evidentiary value of statements recorded without administering oath? What happens if the officer omits to administer oath when the statute speaks of sworn statement? Can the taxpayer retract the statement if it is not under oath?
Let us examine some of these issues.
Meaning:
If we look at dictionary, it says that an oath is a formal, sincere promise, often made in the name of God. In other words, the person giving the statement undertakes to give truthful answers to the questions asked.
Format of Oath:
Income-tax Act does not give the format of oath to be administered. It is an accepted principle of law that if the Income-tax Act is silent on a particular matter, the authorities are at liberty to invoke other relevant enactments. Therefore, let us go to Oaths Act, 1969, which governs the procedure relating to Oath.
Section 6 of the Oaths Act enjoins that all oaths must be in the format prescribed in the Schedule to the Act. Of course, this format is not sacrosanct. The Proviso to section 6 states that courts may allow a different format subject to conditions laid down therein.
Authority to Administer:
Section 3 of the Oaths Act says that oath maybe administered by the authority who is qualified to admit evidence. For example, in assessment proceedings, Assessing Officer is empowered to collect or admit evidences. Therefore, such officer can administer oath.
There are several sections under Income-tax Act under which statements are recorded. These sections clearly say who can record statements. According to Section 132(4) an Authorised Officer can record statement. Section 131 specifies various authorities who are empowered to issue summons and consequently, record statements. Under section 133A(5), any Income-tax authority (including an Inspector) may record statements. Statements are recorded for admission/collection of evidence. Therefore, the authorities specified in the relevant sections are qualified to administer oath.
Effect of Oath:
When we talk of the impact of oath, questions that arise are, first, effect of wrong statements under oath; secondly, result of failure to administer oath and thirdly, validity of statement without oath.
Wrong Statement Under Oath:
Section 8 of Oaths Act states that person giving evidence before the authority empowered to administer oath shall be bound to state the truth on such subject. Deliberate wrong statement can result in penal consequences like penalty and/ or prosecution under Income-tax Act and also under other enactments like Indian Penal Code (for offence of Perjury or false evidence).
Failure to Administer Oath:
Section 7 of the Oaths Act says that proceedings and evidence are not invalidated by omission of oath or irregularity of oath.
Hon’ble High Court of Gauhati had an occasion to deal with this issue in Chowkchand Balabux vs. Commissioner of Income-tax 41 ITR 465 Gau. Of course, here the reference was under section 37 of Income-tax Act, 1922, which is similar to section 131 of the 1961 Act. It was held that it is not obligatory for the Income-tax Officer to administer oath under section 37. Relying on section 13 of Indian Oaths Act (X of 1873), which is similar to section 7 of Oaths Act, 1969, the Hon’ble Court held that failure to administer oath does not invalidate the statement.
However, in the case of ACIT Vs Yerra Nagabhushanam 226 ITR 843, Hon’ble High Court of Andhra Pradesh has held that if a statement is recorded under section 132(4), it must be after administering oath. If that is not done, the statement has no evidentiary value. That means when the Act specifically requires examination on oath, administering the same is a must.
Validity of Statement Without Oath:
An interesting question would be, when the Act does not specifically talk of oath, as in section 133A, should oath be administered before statement is recorded? For this purpose, once again we may have to take the help of Oaths Act. Section 4 of this Act states inter alia that oaths or affirmation shall be made by all persons who may lawfully be examined or give or required to give evidence. That is to say, in any statement that is being recorded under any law, administering oath is necessary.
Moreover, Proviso to this section, while exempting children below 12 years of age from being administered oath, states that absence of an oath or affirmation shall not render inadmissible any evidence given by such witness nor affect the obligation of the witness to state the truth. Therefore, it can be concluded that when a person is required to give a statement under any law, whether under oath or otherwise, he is bound to tell the truth and such statement does have evidentiary value.
Retraction:
Next question in this matter is, whether a deponent can retract the statement given under oath. Hon’ble Supreme Court has held in Surjit Singh Chhabra Vs UOI 1 SCC 508 that statement given before Revenue authorities is binding on the deponent unlike that made before Police authorities. Therefore, if the deponent wants to retract, he may have to adduce enough evidence or reason for doing so.
Evidentiary Value of Statements Given under Oath:
General consensus among judicial authorities appears to be that an IT authority cannot act merely on the basis of statements, sworn or otherwise. It was held in ACIT Vs Sushiladevi Agarwal 50 ITD 524 Ahm that an Assessing Officer cannot draw adverse inference without material. Similarly, Hon’ble High Court of Bombay has held in Deepchand and Co Vs ACIT (1995) 51 TT] 421 that “inculpatory confession should be corroborated by independent evidence”. In other words, blind reliance on the statements may not be possible, even if it is made under oath. The statements made will have to be supported by independent evidence. The Apex Court has also held in Pullangode Rubber Produce Co Ltd. Vs St of Kerala 91 ITR 18 SC that admission is an important piece of evidence, but it is not conclusive. A statement recorded may cover questions of fact or questions of law. It was held in Banarsi Das Vs Kanshi Ram AIR 1963 SC 1165 that an admission regarding facts would be binding on the maker; but not that on questions of law.
In conclusion, it can be said that though a sworn statement has evidentiary value and law says that it can be used as evidence, Income-tax authorities will do well to do extra homework and collect relevant and corroborative evidence so that the assessment orders can stand the test of appeal.
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