A vague third-party loose paper without a live nexus cannot justify reassessment under Section 148.

The petitioner challenged a notice dated 16 March 2026 issued under Section 148 of the Income-tax Act, 1961 for AY 2022–23.

The reassessment was based on a loose paper referring to Revenue Survey Nos. 566/1+2 and 575, Godhavi, and mentioning a rate of ₹8,500 per square yard.

The petitioner contended that the paper was neither authored nor signed by him or the co-owners, did not mention his name or that of the purchaser, and bore only the name “Bro. Manish Bopal,” a person unconnected with him.

He had purchased Survey No. 575 by a registered sale deed dated 10 March 2021 and sold it by a registered sale deed dated 21 October 2021; the loose paper was dated 18 March 2019, when he was neither the owner nor in possession of the land.

An earlier reassessment for AY 2021–22, based on the same loose paper, had been quashed by the High Court in Special Civil Application No. 3809 of 2026, decided on 8 April 2026.

The Revenue argued that the notice could not be interfered with at the threshold because the phrases “pertains to” and “relates to” in Section 148 were broad, and that only the existence of relevant prima facie material—not its sufficiency or correctness—was required at the notice stage.

1. Whether the notice issued under Section 148 for AY 2022–23 was validly founded on relevant information having a live and prima facie nexus with the petitioner and alleged escapement of income?

2. Whether a loose paper referring to the relevant survey numbers, but not naming or connecting the petitioner with the transaction, could constitute sufficient material for reopening the assessment?

3. Whether the High Court could quash the reassessment notice at the threshold despite the Revenue’s contention that the petitioner had an alternative opportunity to contest the reassessment proceedings?

The Court applied Section 148 of the Income-tax Act, 1961, including Explanation 2(iv), under which information discovered during search proceedings may justify reassessment where it “pertains to” or “relates to” the assessee; however, such expressions cannot be applied in isolation and the material must establish a prima facie live link between the assessee and the alleged escaped income.

The Court considered Raymond Woollen Mills Ltd. v. Income-tax Officer, (1999) 236 ITR 34 (SC), and Assistant Commissioner of Income-tax v. Rajesh Jhaveri Stock Brokers (P.) Ltd., (2007) 291 ITR 500 (SC), for the principle that, at the notice stage, the Revenue need only show relevant material on which a reasonable person could form the requisite belief, and the sufficiency or correctness of the material is ordinarily not examined.

It also relied on its earlier decision in Deepak Chinubhai Shah v. Deputy Commissioner of Income Tax, [2026] 183 taxmann.com 90 (Gujarat), and the petitioner’s own case concerning AY 2021–22, which held that vague, unsigned third-party material lacking a demonstrable nexus with the assessee cannot sustain reopening.

The Court found that the loose paper contained illegible data, did not name the petitioner or the purchaser, and referred only to “Bro. Manish Bopal,” with whom no connection was established.

The petitioner acquired the land almost two years after the date appearing on the paper, and the Revenue’s linkage was apparently derived from later sale-deed information available on the “Any RoR” government website rather than from the seized material itself.

The Satisfaction Note also failed to establish any connection between the petitioner and the B Safal Group, City Estate Group, City Estate Management India, or City Procon Realtors Private Limited.

Although Sections 148 and 148A permit reliance on information that “pertains to” or “relates to” an assessee, the Court held that these expressions do not dispense with the requirement of a prima facie live link.

The material here was vague, related to an unconnected third party, and did not reasonably demonstrate that the petitioner had paid on-money or earned escaped income.

The facts were therefore materially identical to the petitioner’s earlier case and the decision in Deepak Chinubhai Shah.

The rate of ₹8,500 per square yard and the resulting allegation of undisclosed consideration were based only on hypothesis.

The notice dated 16 March 2026 issued under Section 148 for AY 2022–23 was consequently quashed and set aside, and the writ petition was allowed.