Income-tax reassessment cannot rest on unverified portal information without material linking the assessee to transactions.

The petitioner, a ceramic business entity, challenged the notice issued under Section 148 of the Income Tax Act, 1961, and the consequential order under Section 148A(3) for Assessment Year 2019–20.

The reopening was based on information available on the Income Tax Department’s Insight portal and an alleged transaction involving Angadiya Shri Nilesh Pranjivan Bhatia.

The alleged escaped income was stated to be ₹2,14,42,208.

The petitioner contended that the notice and order contained no material linking it to the alleged transaction and that several similarly situated ceramic dealers had received notices mentioning the identical amount.

Although the petitioner sought the underlying material, the Assessing Officer did not supply it and passed the order under Section 148A(3).

The Revenue opposed the petition, submitting that the Insight portal information and the Angadiya’s statement disclosed transactions distributed among various assessees and justified reopening.

Whether the notice under Section 148 and the order under Section 148A(3) were valid when they did not disclose material specifically linking the petitioner with the alleged transaction or establish the amount of income allegedly escaping assessment.

Whether the Assessing Officer could rely upon information from the Insight portal without independently verifying its genuineness and without supplying the underlying material to the petitioner.

Whether the writ petition was maintainable at the stage of notice and preliminary reopening proceedings, or whether the petitioner was required to pursue the assessment proceedings.

The Court applied Sections 148, 148A(1) and 148A(3) of the Income Tax Act, 1961, which require the Assessing Officer to consider the information suggesting escapement of income, provide the assessee an opportunity to respond, apply independent mind, and pass a reasoned order before issuing a notice under Section 148.

The Court held that reopening proceedings cannot be founded on vague, unverified or general information and that the Assessing Officer cannot conduct a roving or fishing inquiry merely on the basis of information uploaded on the Insight portal.

It also relied on Vasuki Global Industrial Limited v. Principal Chief Commissioner of Income Tax, [2025] 180 taxmann.com 16 (Gujarat), for the principle that information obtained through departmental systems must be examined and verified before it is used to initiate reassessment proceedings.

The Court found that the notice under Section 148A(1) was bereft of material connecting the petitioner to the alleged transaction with the Angadiya.

The fact that identical amounts had been attributed to numerous ceramic dealers indicated that the alleged figure had not been specifically correlated with the petitioner’s transactions.

The order under Section 148A(3) referred generally to a chart of beneficiaries but did not disclose the amount or transaction attributable to the petitioner.

Further, despite the petitioner’s request, the Assessing Officer supplied no supporting material and made no effort to verify the information received from the Insight portal.

Applying the requirement of conscious application of mind and the prohibition against roving and fishing inquiries, the Court held that the statutory safeguards preceding reassessment had not been satisfied.

It held that the reassessment proceedings were invalid because the notice and the order failed to disclose petitioner-specific material, did not establish the alleged escapement of income, and reflected no independent verification of the Insight portal information.

The writ petition was allowed, and the notice dated 29 June 2025 issued under Section 148 and the order dated 29 June 2025 passed under Section 148A(3) were quashed and set aside.