Are officers allowed to press you for an admission during a search or survey?
No. The Board's own instruction says no attempt should be made to obtain a confession as to undisclosed income. Officers are to collect evidence instead, because confessions without credible evidence get retracted and achieve nothing.
Decided by the CBDT Circulars & Instructions on 2003-03-10, reported as Instruction F. No. 286/2/2003-IT (Inv. II), dated 10-3-2003. It bears on section 132, section 132(4), section 133A of the Income Tax Act 1961, in Search, Survey & Block Assessment and Evidence & Burden of Proof matters.
A CBDT instruction binds the department, so this is worth more in a retraction than most judgments. If you were pressed for an admission, the department's own instruction says the officer should not have done it.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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The Board recorded that instances had come to its notice where assessees claimed they had been forced to confess undisclosed income during the course of search and seizure and survey operations, and that such confessions, when not based upon credible evidence, were later retracted while filing returns of income. The instruction was issued to the field formations to correct that practice.
While recording a statement during search and seizure and survey operations no attempt should be made to obtain a confession as to the undisclosed income, and any action to the contrary is to be viewed adversely. Officers are to focus and concentrate on collecting evidence of income leading to information on what has not been disclosed or is not likely to be disclosed to the Department. In pending assessment proceedings too, Assessing Officers are to rely on the evidence and material gathered during the search or survey, or afterwards, when framing the assessment order.
The Board's premise is stated on the face of the instruction: instances had come to notice where assessees claimed they had been forced to confess undisclosed income during search, seizure and survey, and such confessions, if not based upon credible evidence, are later retracted when returns are filed, so that they serve no useful purpose. The corrective is evidentiary rather than testimonial - the search or survey party is to concentrate on collecting evidence of income that reveals what has not been disclosed or is not likely to be disclosed. The instruction then closes the loop at the assessment stage, telling Assessing Officers to rely on the material gathered during or after the search or survey when framing assessments, so that a case does not come to rest on an admission that will not survive. And it adds a disciplinary edge: any action to the contrary shall be viewed adversely.
while recording statement during the course of search & seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely.
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Handle my notice → Ask a CA on WhatsAppNo. The Board's own instruction says no attempt should be made to obtain a confession as to undisclosed income. Officers are to collect evidence instead, because confessions without credible evidence get retracted and achieve nothing. This was decided by the CBDT Circulars & Instructions and bears on section 132, section 132(4), section 133A of the Income Tax Act 1961. It is reported as Instruction F. No. 286/2/2003-IT (Inv. II), dated 10-3-2003. A CBDT instruction binds the department, so this is worth more in a retraction than most judgments. If you were pressed for an admission, the department's own instruction says the officer should not have done it. If it applies to you, the first step is this: Record at the time, in the statement itself if possible, that no coercion is admitted and that documents will follow.
The Board recorded that instances had come to its notice where assessees claimed they had been forced to confess undisclosed income during the course of search and seizure and survey operations, and that such confessions, when not based upon credible evidence, were later retracted while filing returns of income. The instruction was issued to the field formations to correct that practice. The matter was decided on 2003-03-10 by the CBDT Circulars & Instructions. On those facts the CBDT Circulars & Instructions held as follows. While recording a statement during search and seizure and survey operations no attempt should be made to obtain a confession as to the undisclosed income, and any action to the contrary is to be viewed adversely. Officers are to focus and concentrate on collecting evidence of income leading to information on what has not been disclosed or is not likely to be disclosed to the Department. In pending assessment proceedings too, Assessing Officers are to rely on the evidence and material gathered during the search or survey, or afterwards, when framing the assessment order.
The Board's premise is stated on the face of the instruction: instances had come to notice where assessees claimed they had been forced to confess undisclosed income during search, seizure and survey, and such confessions, if not based upon credible evidence, are later retracted when returns are filed, so that they serve no useful purpose. The corrective is evidentiary rather than testimonial - the search or survey party is to concentrate on collecting evidence of income that reveals what has not been disclosed or is not likely to be disclosed. The instruction then closes the loop at the assessment stage, telling Assessing Officers to rely on the material gathered during or after the search or survey when framing assessments, so that a case does not come to rest on an admission that will not survive. And it adds a disciplinary edge: any action to the contrary shall be viewed adversely. In the words reproduced by the source cited on this page: "while recording statement during the course of search & seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely."
It was decided by the CBDT Circulars & Instructions on 2003-03-10 and is reported as Instruction F. No. 286/2/2003-IT (Inv. II), dated 10-3-2003. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 132, section 132(4), section 133A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. While recording a statement during search and seizure and survey operations no attempt should be made to obtain a confession as to the undisclosed income, and any action to the contrary is to be viewed adversely. Officers are to focus and concentrate on collecting evidence of income leading to information on what has not been disclosed or is not likely to be disclosed to the Department. In pending assessment proceedings too, Assessing Officers are to rely on the evidence and material gathered during the search or survey, or afterwards, when framing the assessment order. It arises in Search, Survey & Block Assessment and Evidence & Burden of Proof matters, on section 132, section 132(4), section 133A of the Income Tax Act 1961. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. In any retraction, cite this instruction by its file number and date alongside your factual account. Pair it with the Board's later letter of 18 December 2014, which reiterates the point in stronger terms.
Still good law. The instruction is carried unamended with no withdrawal or supersession annotated. The Board returned to the same subject in its letter F.No. 286/98/2013-IT (Inv.II) dated 18 December 2014, which records that instances and complaints of undue influence and coercion had come to notice, refers to the instructions and guidelines issued by the Board from time to time through which it had emphasised the need to focus on gathering evidence and strictly to avoid obtaining admissions under coercion or undue influence, and directs that any such instance shall be viewed adversely. Note, however, that the text of that letter as carried refers to those earlier instruments only by a cross-reference block that is not reproduced, so it does not itself name the instruction of 10 March 2003. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The instruction is dated 10 March 2003 and bears F. No. 286/2/2003-IT (Inv. II); secondary sources giving 23 March 2003 or dropping the (Inv. II) suffix are wrong. Two parts of it are commonly overlooked. It does not stop at telling officers not to seek a confession - it adds that any action to the contrary shall be viewed adversely, and it directs Assessing Officers to frame pending assessments on the evidence and material gathered during or after the search or survey. What it does not do is decide the evidentiary value of a statement that has been recorded, which is a matter for the case law. No decision applying the instruction was read. Its treatment in CIT v. S. Khader Khan Son was not verified. The database returns a large body of case law citing the instruction, including Bannalal Jat Constructions (P.) Ltd. v. ACIT [2019] 106 taxmann.com 128 (SC), decided in favour of the revenue, so the case law should be examined before the instruction is relied on as an answer to an admission recorded under section 132(4). This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
While recording a statement during search and seizure and survey operations no attempt should be made to obtain a confession as to the undisclosed income, and any action to the contrary is to be viewed adversely. Officers are to focus and concentrate on collecting evidence of income leading to information on what has not been disclosed or is not likely to be disclosed to the Department. In pending assessment proceedings too, Assessing Officers are to rely on the evidence and material gathered during the search or survey, or afterwards, when framing the assessment order.
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