Reassessment proceedings cannot rest on unverified portal information lacking material linking the assessee.

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 Insight portal and an alleged transaction involving Angadiya Shri Nilesh Pranjivan Bhatia, under which the petitioner was purportedly treated as having received or benefited from an amount of ₹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 been issued notices on the basis of the identical amount.

The Revenue maintained that the Insight portal information and the statement of Shri Bhatia disclosed distribution of the amount among different assessees and justified reopening of the assessment.

1. Whether the notice under Section 148A(1) and the order under Section 148A(3) of the Income-tax Act were sustainable when they contained no specific material linking the petitioner with the alleged transaction or identifying the amount allegedly escaping assessment.

2. Whether the Assessing Officer could initiate reassessment proceedings merely on the basis of unverified information available on the Insight portal, without supplying the material to the assessee and applying independent mind to its relevance and genuineness.

The Court applied Sections 148, 148A(1) and 148A(3) of the Income-tax Act, 1961, which require the Assessing Officer, before issuing a reassessment notice, to consider the information suggesting escapement of income, provide the assessee an opportunity to respond, and pass a reasoned order after considering that response.

The Court also 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 apply independent mind and verify information received through the Insight portal rather than relying on it mechanically.

The Court found that the notice and the order did not disclose any material connecting the petitioner with the alleged transaction involving Shri Bhatia or explaining how ₹2,14,42,208 constituted income that had escaped assessment in the petitioner’s case.

Although the order referred to a chart containing names of alleged beneficiaries, it did not identify the transaction or amount attributable to the petitioner.

The Revenue had also failed to supply the underlying material despite the petitioner’s request, and the Assessing Officer had made no effort to verify the information received from the Insight portal.

The fact that similarly situated ceramic dealers had been issued notices containing substantially identical allegations and amounts further demonstrated the absence of a case-specific 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.