Reassessment cannot rest on unverified portal information without material linking the assessee to transactions.

The petitioners challenged the notice issued under Section 148 of the Income-tax Act, 1961, and the consequential order under Section 148A(3) for A.Y. 2019–20, alleging escapement of income of ₹2,14,42,208 based on information concerning transactions with Angadiya Shri Nilesh Pranjivan Bhatia.

The petitioners contended that the notice and order contained no material connecting them with the alleged transaction and that several similarly situated ceramic dealers had received notices involving the identical alleged amount.

The Revenue relied on information available on the Insight portal and a statement of the Angadiya, asserting that the amount had been distributed among different assessees.

The Court found that neither the notice nor the order disclosed petitioner-specific transaction details or supplied supporting material, and that the Assessing Officer had not independently verified the Insight portal information.

1. Whether the notice under Section 148A(1)/Section 148 and the order under Section 148A(3) were legally sustainable when they failed to disclose material linking the petitioners to the alleged transaction and alleged escapement of income.

2. Whether the Assessing Officer could initiate reassessment proceedings solely on the basis of unverified information available on the Insight portal, without applying independent mind or conducting a proper verification.

The Court applied Sections 148 and 148A of the Income-tax Act, 1961, which require the Assessing Officer to possess and evaluate relevant information suggesting escapement of income before issuing a reassessment notice, and to pass a reasoned order under Section 148A(3) after considering the assessee’s reply.

The Court reiterated that reassessment proceedings cannot be founded on a roving or fishing inquiry based merely on information available on the Insight portal; the Assessing Officer must apply independent mind, verify the information, and disclose material demonstrating a rational link between the assessee and the alleged escapement.

It also relied on Vasuki Global Industrial Limited v. Principal Chief Commissioner of Income Tax, [2025] 180 taxmann.com 16 (Gujarat), which holds that information from the Insight portal cannot be blindly relied upon without verification.

The Court observed that the impugned notice and order merely referred generally to the alleged transaction with the Angadiya and to a chart of beneficiaries, but did not identify any transaction or amount attributable to the petitioners.

The fact that the identical amount of ₹2,14,42,208 was attributed to multiple ceramic dealers further indicated that the information had not been correlated with the individual assessee.

Although the petitioners had specifically sought the supporting material, the Assessing Officer supplied none and made no effort to verify the information obtained from the Insight portal.

Applying the requirement of independent application of mind and the prohibition against fishing inquiries, the Court held that the statutory preconditions for reopening had not been satisfied.

It held that the reassessment proceedings were unsustainable because the notice and order contained no petitioner-specific material establishing a link with the alleged Angadiya transaction and were based on unverified Insight portal information.

Accordingly, the notice dated 28 June 2025 issued under Section 148 and the order dated 28 June 2025 passed under Section 148A(3) were quashed and set aside, and the writ petition was allowed.