Reassessment cannot be initiated solely on unverified Insight Portal information lacking assessee-specific material.

The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961, dated 29 June 2025, and the consequential order under Section 148A(3) for Assessment Year 2019–20.

The proceedings were based on information allegedly available on the Insight portal and a statement of Angadiya Shri Nilesh Pranjivan Bhatia, according to which an amount of ₹2,14,42,208 had allegedly been distributed among different assessees.

The petitioner contended that the notice and order did not disclose any material connecting it with the alleged transaction and that several ceramic-business assessees had received notices containing identical allegations and identical amounts.

Although the petitioner sought the underlying material and transaction details, the Assessing Officer did not furnish them and proceeded to pass the order under Section 148A(3).

The Revenue opposed the writ petition on the ground that the petitioner should face the assessment proceedings and submitted that the Insight portal information, together with the Angadiya’s statement, constituted sufficient material for reopening.

1. Whether the notice under Section 148A(1) and the order under Section 148A(3) of the Income Tax Act were valid when they did not disclose material linking the petitioner to the alleged transaction or specify the amount allegedly attributable to the petitioner.

2. Whether the Assessing Officer could initiate reassessment proceedings merely on the basis of unverified information from the Insight portal, without independently applying mind and furnishing the underlying material to the petitioner.

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 of being heard, and pass a reasoned order based on the material available.

The Court reiterated that reassessment proceedings cannot be initiated on the basis of vague, unverified or mechanically reproduced information and that the Assessing Officer must independently apply mind to the material and establish a rational nexus between the information and the assessee.

Relying on Vasuki Global Industrial Limited v. Principal Chief Commissioner of Income Tax, [2025] 180 taxmann.com 16 (Gujarat), the Court held that information appearing on the Insight portal cannot be blindly relied upon and cannot justify a roving or fishing inquiry without verification.

The Court found that the notice under Section 148A(1) was bereft of material connecting the petitioner with the alleged transaction involving the Angadiya or demonstrating that ₹2,14,42,208 represented income escaping assessment in the petitioner’s case.

The fact that 15 assessees, and allegedly 52 ceramic dealers, were proceeded against for the same amount indicated that the information had been reproduced without identifying the petitioner-specific transaction.

The order under Section 148A(3) referred generally to a chart of beneficiaries but did not disclose the amount attributable to the petitioner, furnish the relevant material, or show any verification of the Insight portal information.

Consequently, the Court held that the Assessing Officer had failed to demonstrate application of mind and had impermissibly initiated a roving and fishing inquiry.

It held that the impugned reassessment proceedings were unsustainable because the notice and order lacked petitioner-specific material, failed to disclose the alleged transaction, and did not reflect independent verification or application of mind.

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) of the Income Tax Act were quashed and set aside.