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Sri A.V.Shiva Karthikeya, learned counsel for the appellants submits that the sole basis for the Assessing Officer to pass orders dated 01.12.1998 was the statements recorded from the respective appellants in the course of survey and the appellants have retracted from the same stating that they were put under pressure and duress, and have also filed affidavits presenting their version. He contends that the very fact that the cheques for the amount of the probable tax and interest were extracted on the day of inspection, would reveal the nature of coercion and pressure exerted upon the appellants. He submits that a statement recorded during the course of survey and search can constitute the sole basis for an Assessing Officer to pass orders, only when it is not retracted from, and once it is retracted, the order of assessment must be based upon some other material. He has placed reliance upon certain precedents.

Sri J.V.Prasad, learned counsel for the respondent, on the other hand, submits that the statements were made by the appellants on their own accord and obviously, for that reason, the Assessing Officer did not proceed further in the survey, and gather other material. He contends that in case the statements were recorded under threat, coercion or duress, the normal course of conduct would have been to retract from them at the earliest, and that in the instant case, the so called retraction is after more than one year from the date of recording of the statements. He submits that the Assessing Officer, the Commissioner and the Tribunal have decided the matter correctly and no interference is warranted.

If the statement is not retracted, the same can constitute the sole basis for the authorities to pass an order of assessment. However, if it is retracted by the person from whom it was recorded, totally different considerations altogether, ensue. The situation resembles the one, which arises on retraction from the statement recorded under Section 164 Cr.P.C. The evidentiary value of a retracted statement becomes diluted and it looses the strength, to stand on its own. Once the statement is retracted, the Assessing Authority has to garner some support, to the statement for passing an order of assessment.

In I.T.A.No.112 of 2003, this Court dealt with the very aspect and held that a retracted statement cannot constitute the sole basis for fastening liability upon the assessee.

In the instant case, the appellants specifically pleaded that the statements were recorded from them by applying pressure, till midnight, and that they have been denied access outside the society. The Assessing Officer made an effort to depict that the withdrawal or retraction on the part of the appellants is not genuine. We do not hesitate to observe that an Assessing Officer does not have any power, right or jurisdiction to tell, much less to decide, upon the nature of withdrawal or retraction. His duty ends where the statement is recorded. If the statements are retracted, the fate thereof must be decided by law meaning thereby, a superior forum and not by the very authority, who is alleged to have exerted force.