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

The petitioner, a ceramic-business company, challenged the notice issued under Section 148 of the Income-tax Act, 1961, and the consequential order under Section 148A(3), both dated 28 June 2025, concerning Assessment Year 2019–20.

The reopening was based on information available on the Income Tax Department’s Insight portal and an alleged transaction involving Angadia 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 and that identical amounts had been attributed to several ceramic dealers in the Morbi area.

The Revenue argued that the Insight portal information and the Angadia’s statement showed that the petitioner had entered into transactions aggregating to ₹2,14,42,208 and that the assessment proceedings should therefore continue.

Whether the notice under Section 148 and the order under Section 148A(3) could be sustained when they contained no specific material linking the petitioner to the alleged transaction with the Angadia or identifying the petitioner’s individual escaped income?

Whether the Assessing Officer could initiate reassessment proceedings merely on the basis of unverified information available on the Insight portal, without demonstrating independent application of mind?

The Court applied Sections 148 and 148A of the Income-tax Act, 1961, which require the Assessing Officer to consider the material suggesting escapement of income and to pass a reasoned order before issuing a reassessment notice.

The Court also considered the principle stated in Vasuki Global Industrial Limited v. Principal Chief Commissioner of Income Tax, [2025] 180 taxmann.com 16 (Gujarat), that information received through departmental systems, including information originating from the DGGI, cannot be relied upon mechanically without verification and application of mind.

The Court examined the Section 148A(1) notice and found that it did not contain any material connecting the petitioner with the alleged Angadia transaction for ₹2,14,42,208.

Although the petitioner had specifically sought the underlying material, the Assessing Officer neither supplied it nor verified the genuineness and relevance of the Insight portal information.

The Court also noted that identical amounts had been attributed to multiple ceramic dealers and that the chart relied upon by the Assessing Officer did not disclose the amount of any transaction attributable to the petitioner.

Consequently, the material did not establish a reasonable, petitioner-specific basis for alleging escapement of income, and the proceedings amounted to an impermissible roving and fishing inquiry rather than a reassessment founded on verified information and due application of mind.

It held that the reassessment proceedings could not be sustained because the impugned notice and order failed to disclose petitioner-specific material, failed to identify any transaction involving the petitioner, and reflected no independent verification or application of mind to the Insight portal information.

The writ petition was accordingly allowed, and 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.