- (1.) UNDER s. 148 of the IT Act, 1961.
(2.) QUASHING of the reassessment proceedings initiated by the said notice is also prayed. the reassessment proceedings have been rejected by the Asstt. CIT.
(3.) COUNTER affidavit has been filed. The counter affidavit discloses that under the Voluntary Disclosure of Income Scheme of 1997 (hereinafter referred to as the VDIS), unscrupulous assessees in Maharashtra, Gujarat, Madhya Pradesh, Bihar, Karnataka, West Bengal, Goa, Tamil Nadu, Punjab, Uttar Pradesh, Delhi, Andhra Pradesh etc. disclosed unaccounted money in the form of non -existent diamonds in their possession. These non -existent diamonds were shown to have been sold, immediately after the disclosure, by the assessees to 4 concerns (hereinafter referred to as the "front concerns"). These 4 "front concerns" in turn are alleged to have sold the non -existent diamonds to another group of 5 concerns (hereinafter referred to as the "bulk concerns"). From these "bulk concerns", the diamonds were shown to have been sold to another group of 10 concerns (hereinafter referred to as "retail concerns"). Ultimately, the diamonds were shown to have been disposed of by these "retail concerns" to a large number of persons from Surat without even mentioning their names and addresses. All transactions of sale by the "retail concerns" are in cash and have been routinely kept below Rs. 20,000 by the "retail concerns". The money of such cash sales were deposited in about 83 bank accounts opened in Mumbai in the names of the "retail concerns". Thereafter, in order to show accommodation, cheques/demand drafts to the beneficiaries have been issued from the bank accounts of the "retail concerns" to the "bulk concerns" who in turn have issued cheques from their accounts at Mumbai to the "front concerns", and from the accounts of the "front concerns" cheques/demand drafts have been issued to the beneficiaries assessees. Investigations revealed that this entire exercise involving money to the tune of Rs. 2,32,03,17,879 was master -minded by two chartered accountants namely Kamal Kumar Johari and Hari Om Sharma, who had floated these concerns wherein their close relatives, acquaintances, confidants were made either partners or proprietors or shareholders. All the 4 "front concerns" and the 5 "bulk concerns" have shown their business address at Mumbai as B -12/B -18, Swati Manor Building, N.C. Kelkar Road, Dadar(W), Mumbai, which is actually office address of the two chartered accountants. The Surat branch office of all the "front concerns" and the "bulk concerns" is shown to have operated only from one premises namely 406, Pooja Building, Hawardsheri, Mahidharpura, Surat and 9 of the "retail concerns" have been shown as operating from Renuka Niwas, 2nd Floor, Bhatwadi Opera House, Mumbai, which was a small premises in control of Mahendra Johari brother of Kamal Kumar Johari, chartered accountant. Five of the "retail concerns" have also been shown as operating from B -18, Swati Manor Building, N.C. Kelkar Road, Dadar(W), Mumbai, i.e., the office of the CAs. All the bank accounts of the "retail concerns" and some of the bank accounts of the "front" and "bulk" concerns were opened simultaneously around the time of announcement of VDIS and were closed simultaneously shortly after the VDIS concluded, that is after the fraudulently declared non -existent diamonds were purchased back on paper from the unscrupulous assessees by this group. Even the bank account numbers of these concerns are in a running serial indicating that they were opened together in one go at the same time. The account opening forms in the banks show that at the time of opening as many as 14 bank accounts of the "retail concerns", only one telephone number namely 437991 has been given to the banks for contacting all these concerns. This telephone number belongs to the office of Kamal Kumar Johari and Hari Om Sharma, CAs. This is the background. ;