A statement given in an affidavit  is deemed to be correct unless proved otherwise- SC

Introduction

An Affidavit is a written official statement of fact made by an individual (called a deponent) under an oath. It is administered by a person who has the authority to regulate oaths. The affidavit can be signed in front of the notary public or Oaths Commissioner. The person who prepares an affidavit declares that the content mentioned in the affidavit is true and accurate, and nothing has been concealed or misstated.

Although the affidavit is considered as a proof of the facts stated therein, under the Indian law, the courts have no jurisdiction to admit evidence by the way of an affidavit. It is merely treated as an evidence under Section 3 of the Evidence Act of India. It can be used for verification or penalty of perjury which requires court proceedings.

Let us refer to the case of Mehta Parikh & Co v. ITO (1956), where the issue under consideration was whether facts put forth by the assessee in an affidavit could be disregarded without any material to dislodge the position taken by the assessee?

Facts of the Case:

• The assessee firm was carrying on mill store business at Ahmedabad.
• The Governor-General on 12-1-1946, promulgated the High Denomination Bank Notes (Demonetisations) Ordinance, 1946, and high denominations bank notes ceased to be legal tender on the expiry of 12-1-1946.
• Pursuant to the Ordinance the assessee, on 18-1-1946, encashed high denomination notes of Rs. 1,000 each of the face value of Rs. 61,000.
• After examining the entries in the books of account of the Assessee and the position of the cash balances on various dates and the nature and extent of the receipts and payments during the relevant period, the AO came to the conclusion that in order to sustain the contention of the appellants he would have to presume that there were eighteen high denomination notes of Rs. 1,000 each in the cash balance on 1st January, 1946, and that all cash receipts after 1-1-1946, and before 13-1-1946, were received in currency notes of Rs. 1,000.
• The AO, therefore, added the sum of Rs. 61,000 to the assessable income of the assessee from undisclosed sources.
• Before the AAC the assessee produced affidavits from some of the parties to demonstrate that payment was received in Rs. 1,000 denomination notes.
• The ACC did not accept the statements contained in the said affidavits and dismissed the appeal

Observations of the Supreme Court (SC)

• The facts proved or admitted may provide evidence to support further conclusions to be deduced from them, which conclusions may themselves be conclusions of fact and such inferences from facts proved or admitted could be matters of law.
• The court would be entitled to intervene if it appeared that the fact finding authority had acted without any evidence or upon a view of the facts, which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question.
• The High Court recognised this position in effect but went wrong in applying the true principles of interference with such findings of fact to the present case.
• The appellants had furnished a reasonable explanation for the possession of the high denomination notes of the face value of Rs. 61,000 and there was no justification for having accepted it in part and discarded it in relation to a sum of Rs. 30,000.
• Neither scrutiny was made by the AO or the AAC of the entries in the cash book nor were the entries challenged.
• No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party and no cross examination of the deponents carried out by the Authorities.
• Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits.

Therefore, when a statement is given in affidavit, the same is proved to be correct unless proved otherwise.