Sejal Jewellary & Anr. Vs Union of India & Ors (Bombay High Court)
The Bombay High Court decided a batch of writ petitions raising a common question of law concerning the validity of notices issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2012-13. The principal issue was whether the Assessing Officer could invoke Section 147 on the basis of material arising from a search conducted under Section 132, or whether the statutory procedure under Sections 153A and 153C was required.
The lead petitioner, a partnership firm engaged in manufacturing and trading gold and diamond jewellery, filed its return of income on 28 September 2012. A search under Section 132 was conducted on 4 October 2018. Thereafter, the Assessing Officer issued a notice dated 29 March 2019 under Section 148, stating that income chargeable to tax had escaped assessment. Upon the petitioner’s request, the reasons for reopening were furnished. Those reasons expressly referred to the search and seizure action under Section 132, stating that incriminating material, including loose papers and electronic data, had been seized from Shilpi Jewellers Pvt. Ltd. and its group concerns. The reasons further alleged that the petitioner had received a loan of Rs. 25,00,000 from M/s Green Valley Gems Pvt. Ltd., which was stated to be a shell company providing accommodation entries. The Assessing Officer concluded that the genuineness of the loan remained unsubstantiated and that income had escaped assessment.
