Recording of Statement
Introduction
Section 132(4) empowers authorised officers to record statements on oath during search operations. Such statements have evidentiary value and may enable the assessee to obtain immunity from penalties if undisclosed income is voluntarily declared. The evidentiary weight depends on the circumstances of recording and corroborative material.
Purpose of Recording Statement
Recording statements during search enables the authorised officer to seek explanations regarding books, documents, or assets found and to verify matters relevant to proceedings under the Act. Statements are significant both for the Department, which uses them as evidence, and for the assessee, who may secure reduced penalties under Section 271AAB if undisclosed income is properly declared in the course of the search.
Evidentiary Value
A statement under Section 132(4) is one piece of evidence indicating acceptance of undisclosed income. It is not conclusive, and its weight must be assessed in light of all facts and supporting material. Courts have consistently held that final assessment depends on totality of evidence, not merely on the statement.
Manner of Recording Statement
The statement must be recorded on oath after proper administration of the oath by the authorised officer. Where the statement is not recorded in a language understood by the person, it must be explained to him before he signs. The assessee may request correction where recorded answers do not reflect what was intended. The statement must be recorded during the course of search, i.e., after commencement and before conclusion of the search. Statements recorded prior to commencement are under Section 131(1A). Statements under Section 132(4) may be recorded only from persons found in possession or control of books, documents, or assets. A person below the rank of Income-tax Officer cannot record such statements.
Signing of Statement and Supply of Copy
The statement is signed by the authorised officer and witnesses. The assessee must review the contents and ensure accuracy before signing, as refusal to sign may attract penalty under Section 272A. The statement does not form part of the panchnama, and a copy is not automatically provided; however, the assessee is entitled to obtain a copy before the statement is relied upon in assessment, penalty, or prosecution proceedings.
No Right to Counsel During Statement
Since the statement under Section 132(4) is recorded on oath and requires personal testimony, the assessee is not entitled to be represented by an authorised representative during its recording.
Retraction of Statement
Assessees may retract statements made under pressure or to expedite the search. Retractions often occur where admissions of undisclosed income are not supported by evidence. To prevent coercive confessions, the Board has instructed officers to focus on evidence gathering and avoid seeking admission of undisclosed income through undue influence.