IMPORTANT POINTS
(1) Reopening of assessment/reassessment proceedings – Basis for a valid re-opening of assessment should be availability of tangible material – As long as there is objective tangible material in the form of documents, relevant to the issue, sufficiency of that material cannot dictate validity of notice.
(2) Immunity granted by a tax amnesty scheme in respect of liabilities under some enactments, did not afford protection against action under other enactments or laws.

JUDGMENT

S. Ravindra Bhat, J.

1. Special leave granted. With consent of counsel for parties, the appeal was heard finally. The Commissioner of Income tax (hereafter “the revenue”) appeals against a judgment of the Gujarat High Court,¹[Dated 14 August, 2018 in Special Civil Application No. 21028 of 2017] which quashed a notice issued under Section 147/148, Income Tax Act (hereafter “the Act”) seeking to re-open the respondent’s assessment, for the assessment year (AO) 2010-11. The respondent is hereafter, referred to as “the assessee”.

2. The facts are that search proceedings were conducted- by the revenue, under the Act, at the office premises of one Shirish Chandrakant Shah on 09.04.2013 at Mumbai; during the course of the search, several materials- and documents, were seized. On analysis of such documents, the revenue was of opinion that Shirish Chandrakant Shah was providing accommodation entries, through various companies controlled and managed by him, and that the assessee was one of the beneficiaries of the business (of accommodation entries provided by Shri Shirish Shah) through bogus companies. This was based on the fact that many companies which invested amounts towards share capital on high premiums -in the assessee’s company were also controlled and managed by Shri Shirish Shah. The AO, on a consideration of these and other materials, was of opinion that the assessee was also a beneficiary of the accommodation entries provided by Shri Shirish Shah. On the basis of this opinion the impugned notice to re-assess the income of the assessee for AY 2010-2011, was issued on 31.3.2017.

3. The assessee is a private limited company and had filed return of income for the AY 2010-11 on 25.9.2010. The return was accepted under section 143(1) of the Act without scrutiny. On 31.3.2017, the impugned notice was issued. The AO also furnished reasons recorded by him for issuing notice of reassessment.

4. The “reasons to believe” which were the basis for re-opening the assessment, recorded that search proceedings were conducted in the M.R. Shah group and Champalal group of companies on 20.09.2016 and that during the course of previous searches in the case of Shirish Chandrakant Shah, an accommodation entry provider in Mumbai, it was observed that huge amounts of unaccounted moneys of promoters/directors were introduced in closely held companies of the assessee’s group. The reasons to believe also stated that the chairman of M.R. Shah Group was asked about the application money received by the assessee, during the statement- recorded under Section 132(4) of the Act, on 18.11.2016; in the course of that statement, he disclosed that M/s. Garg Logistics Pvt. Ltd. had declared Rs. 6.36 crores as undisclosed cash utilized for investment in the share capital of the assessee, M.R. Shah Logistics Pvt. Ltd. through various companies. The assessee company’s chairman voluntarily disclosed the statements made by Garg Logistics under Section 132 of the Act, about the declaration by Garg Logistics P Ltd, under the Income Declaration Scheme (IDS).

5. The AO, in the reasons to believe, compared the investments made by Pravin Chandra Aggarwal, i.e. the assessee company’s Chairman with form no.2 of the assessee company and the records of the Registrar of Companies and prepared a chart, which is reproduced in a chart below

“On comparison of such data following discrepancies are noted;