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Section 64 of the Finance Act, 1997 - Voluntary Disclosure of Income Scheme, 1997 - Assessment years 1994-95 to 1996-97 - Pursuant to Central Government's Scheme, assessee made application under section 65 which was accepted - A search was conducted at premises of a third party and it was found that transaction covered under said disclosure was sham - Department, therefore, cancelled certificate and initiated proceedings under section 148 - Whether where information given in declaration was found to be incorrect, any certificate issued pursuant to that incorrect declaration was also incorrect and, therefore, department was right in cancelling that certificate - Held, yes - Whether where a power to issue a certificate is available, power to recall it in event of any fraud is always available to authorities - Held, yes - Whether theory of 'no knowledge of search' on ground that it was conducted at premises of third party could not be accepted since assessee had never denied it and had all along been making averments with regard to transactions involved - Held, yes FACTS The petitioner-assessee, a public limited company, had purchased cast iron moulds in year ending 31-3-1994 and leased the same to its customers. It had also purchased Carbon-di-oxide gas cylinders from DDKI on 11-9-1994. The Central Government notified the Voluntary Disclosure of Income Scheme, 1997. The assessee submitted an application under section 65(1) of the said Scheme, it claimed depreciation on machinery, cast iron moulds and gas cylinders. The same was accepted. Thereafter, a search under section 132 was carried out in the business premises of MGPL on 6-3-1996. During search, it was detected that DDKI was a non-existent entity. It was admitted that it was the assessee's own business concern. It had also been stated that the cylinders actually shown to the leasing company were not there at all and the entire transaction was a sham transaction. Therefore, the Income-tax Department in terms of section 64(2)(ii) of the said Scheme cancelled the certificate issued under section 62(2) of the Scheme after considering the assessee's objections. Thereafter the department issued notices under…

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