UPDATE: It has been clarified that Mahesh Shah was detained, and not arrested, on Saturday. He has been released on Sunday and will be call for further questioning.
In a major twist, low profile Ahmedabad businessman Mahesh Shah—who declared a whopping ₹13,860 crore of undisclosed income under the Government's Income Declaration Scheme (IDS) and went missing without paying the first instalment of tax—emerged before the media to disclose that the money was not his but belonged to a powerful coterie of "politicians, businessmen and officers".
Shah made this admission on a live television programme on Saturday evening. Shah had done the disappearing act around the time he defaulted on the first instalment of tax and the Income Tax department raided his office and residence on November 29 and 30. “This was not my money. It belongs to big names and I will disclose them to the income-tax authorities,” he added.
Shah said that he was in Mumbai when the IT department raided his house and rushed directly to the TV studio to make public his admission. "I am not a runaway. My family has little knowledge about my work,” he said.
Shah claimed that he had some requirements of his own, obliquely hinting at the fact that this was the reason he may have agreed to own up to the money. “This was the reason that I had agreed to file the disclosure under the Income Declaration Scheme (IDS). I also wanted to pay the first instalment but the people who were real owners of this money chose to back off. The IT authorities too complicated matters by cancelling my form two days before the deadline of November 30,” he told the ETV news channel, adding that the truth would come out soon.
No sooner did the channel air his interview than Income Tax officers and the police rushed to the television studio to arrest Shah.
He made it clear on live TV before his arrest that none of his friends, family or his chartered accountant had anything to do with the situation.
A low profile businessman in Ahmedabad, Shah shot into the radars of the income-tax department when he volunteered a disclosure of income of over ₹13,860 crores. His chartered accountant Tehmul Sethna of the century-old Apaji Amin & Co LLP, headquartered in Ahmedabad, who counselled him to come clean had described his client as an extremely low profile personality who preferred a life of simplicity, travelling most of the time in auto-rickshaws.
Shah took his CA’s advice and came clean but it seemed that he had developed the jitters. Shah is reported to have visited the IT office on September 30, 2016, the final day of the IDS scheme. He also submitted the statutory form No. 2 under IDS on October 14, which the IT department approved. This meant Shah would have to pay up 45%, or approximately ₹6,237 crores of the amount declared as tax. However, Shah defaulted on the first instalment payment of ₹1,560 crores, past the due date of November 30. Thereafter, the tax sleuths got into the act.
Shah’s form No.2 under section 193 of the Finance Act 2016 was cancelled and the tax department raided his office and residence, and those of his CA, but Shah was nowhere to be found.
Mahesh Shah has now surfaced in dramatic fashion on Saturday evening to open up a new chapter altogether.
RK Misra is a senior journalist based in Gandhinagar, Gujarat