Amnesty Scheme declaration does not bar section 68 enquiry into unexplained credits in another assessee's books.

A declaration under the Amnesty Scheme gives immunity only to the declarant for income actually belonging to that person; it does not bar tax from examining, in another assessee's assessment, whether credits in its books are in fact unexplained income. The statutory fiction created by the Scheme is limited and cannot override enquiry under section 68 of the Income-tax Act, 1961. The assessee-firm may still establish before the Assessing Officer that the credits were genuine deposits of the named persons and not its own undisclosed income. Accordingly, a notice under section 143(2) was not without jurisdiction merely because the amounts had earlier been declared and taxed under the Amnesty Scheme.

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Issues: Whether a notice issued under section 143(2) of the Income-tax Act, 1961, could be challenged as without jurisdiction on the ground that the amounts credited in the firm's accounts had earlier been declared and taxed under the Amnesty Scheme by the individuals concerned.

Analysis: The declaration under the Amnesty Scheme granted immunity only to the declarant in respect of income actually belonging to that declarant. It did not prevent the income-tax authorities from examining, in the assessment of another person, whether credits shown in its books were in truth its income from undisclosed sources. The legal fiction created by the Scheme was of limited scope and did not override the enquiry permissible under section 68 of the Income-tax Act, 1961. The assessee-firm remained free to establish before the Assessing Officer that the credits represented the genuine income of the named depositors and not the firm's income.

Conclusion: The notice was not without jurisdiction and could not be quashed on the ground of prior declaration under the Amnesty Scheme. The challenge failed.

Ratio Decidendi: A declaration under the Amnesty Scheme does not bar enquiry into the true source of credits in another assessee's books, and the statutory fiction under the Scheme cannot displace section 68 of the Income-tax Act, 1961 in proceedings against persons other than the declarant.

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