Reassessment cannot rest on unverified Insight Portal information lacking material linking the assessee to alleged escapement.

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, both dated 29 June 2025.

The proceedings were based on information available on the Income Tax Department’s Insight portal and an alleged transaction involving Angadiya Shri Nilesh Pranjivan Bhatia, under which income of ₹2,14,42,208 was stated to have escaped assessment.

The petitioner contended that the notice and order did not disclose any material connecting it with the alleged transaction, despite its request for such material.

It further submitted that identical notices had been issued to several ceramic dealers, mentioning the same alleged escaped-income amount, without identifying the amount attributable to each assessee.

The Revenue maintained that the Insight portal information and the Angadiya’s recorded statement sufficiently indicated that the petitioner had entered into transactions aggregating to ₹2,14,42,208, and that the assessment proceedings should be allowed to continue.

1. Whether the notice under Section 148 and the order under Section 148A(3) of the Income-tax Act were legally sustainable when they did not disclose specific material linking the petitioner to the alleged transaction or identify the amount attributable to it.

2. Whether the Assessing Officer could initiate reassessment proceedings solely on the basis of unverified information available on the Insight portal, without independently applying mind and supplying the supporting material to the assessee.

3. Whether the High Court should interfere under its writ jurisdiction at the stage of reassessment proceedings, where the foundational notice and order disclose no specific basis for the alleged escapement of income.

The Court applied Sections 148, 148A(1), and 148A(3) of the Income-tax Act, 1961, which require the Assessing Officer to possess and examine relevant information suggesting escapement of income, consider the assessee’s response, apply an independent mind, and pass a reasoned order before issuing a notice under Section 148.

The Court reaffirmed that reassessment cannot be founded on a roving or fishing inquiry or on unverified information mechanically extracted from the Insight portal.

It relied on Vasuki Global Industrial Limited v. Principal Chief Commissioner of Income Tax, [2025] 180 taxmann.com 16 (Gujarat), for the principle that the Assessing Officer must verify and independently apply mind to information received from departmental sources, including information originating from the DGGI, rather than blindly relying upon it.

The assessee must also be furnished with the material relied upon so that it can effectively respond to the proposed reassessment.

The Court found that the notice issued under Section 148A(1) and the subsequent order under Section 148A(3) merely referred to the alleged transaction with the Angadiya and the figure of ₹2,14,42,208, but contained no material connecting that transaction to the petitioner.

Although the order referred to a chart of alleged beneficiaries, it did not specify the amount allegedly relating to the petitioner.

The Court also noted that identical amounts had been attributed to several ceramic dealers and that another Assessing Officer having jurisdiction over similar cases had not proceeded with reassessment in the absence of an exact, co-relatable amount of escaped income.

The Revenue did not deny these factual assertions.

Since the Assessing Officer neither supplied the relied-upon material nor demonstrated any verification of the Insight portal information, the Court concluded that the proceedings reflected mechanical reliance rather than the requisite application of mind.

The reassessment proceedings were therefore not merely an ordinary factual inquiry but were vitiated at their jurisdictional foundation.

It held that the impugned notice and order were unsustainable because they lacked specific material linking the petitioner with the alleged Angadiya transaction, failed to identify the petitioner-specific amount of escaped income, and were based on unverified 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.