Sejal Jewellary & Anr. Vs Union of India & Ors. (Bombay High Court)
Summary: The Bombay High Court, comprising G. S. Kulkarni and Advait M. Sethna, JJ., by a common judgment dated 18 February 2025, allowed a batch of writ petitions concerning the validity of notices issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2012-13. The principal petition was Writ Petition No. 3057 of 2019, Sejal Jewellary & Anr. v. Union of India & Ors. The petitions raised common questions of law and fact concerning whether the Revenue could invoke Sections 147/148 where the foundation of the reopening was material obtained during a search conducted under Section 132 of the Income-tax Act.
The lead petitioner was a partnership firm engaged in manufacturing and trading in gold and diamond jewellery. It had filed its return for A.Y. 2012-13 on 28 September 2012 declaring total income of Rs.25,52,692/-. A search under Section 132 was subsequently conducted on 4 October 2018 at the premises of the petitioner. The petitioner contended that no incriminating material concerning any bogus loan or accommodation entry had been found in the search.
On 29 March 2019, the Assessing Officer issued a notice under Section 148 stating that there were reasons to believe that income chargeable to tax for A.Y. 2012-13 had escaped assessment within the meaning of Section 147. At the petitioner’s request, the reasons recorded for reopening were furnished on 11 September 2019. Those reasons expressly referred to the search and seizure action and to alleged incriminating evidence in the form of loose papers and electronic data. The reasons stated that the Shilpi Jewellers group and associated concerns had accepted unsecured loans from various shell or paper entities and specifically referred to a loan of Rs.25,00,000/- received by Sejal Jewellery from M/s. Green Valley Gems Pvt. Ltd.
