*Dy CIT Income-tax, Central Circle 1(2) Vs MR Shah Logistics Pvt ltd*
*Forum-Supreme Court Date-28th March 2022*

*Sub-Whether accommodation entry received by the respondent in this case which was said to have been received from another party who had declared income under the IDS Scheme which was though found to be incorrect, the reassessment notice was correctly issued. *

The Supreme Court in this case was called upon to decide whether assumption of jurisdiction in this case to issue notice u/s 148 of the Income-tax Act,1961 was correctly exercised when during the course of search on an accommodation entry provider it was found that the assessee in this case had been given one time entry based on the excel sheets recovered during the course of search. The assessee contended that the amount of share capital was received from a company which had declared income under Income declaration scheme even though when the said declaration when compared with the investment made by the company, the information was not found to be correct. The high court in this case based on the immunity available under the IDS scheme held the reassessment notice to be invalid which was reversed by the Supreme Court in view of the fact that the original order was completed u/s 143(1) as well as based on the catena of decisions in case of Calcutta Discount, Lakhmani Mewal Das and other cases.One important point of law which was held was that the protection which is given to the declarant under IDS is only for limited purpose and cannot by any rule or principle inure work to the assessee’s advantage relying on CBI Vs Sashi Balasubramanian. Thus the judgement of high court was reversed and appeal of department was allowed.

The Reassessment disputes will continue as long as income-tax is there in country , this is only one can say.

Ramesh Patodia
29-03-2022