Reopening cannot rest on unverified portal information lacking material linking the assessee to escaped income.

The petitioners 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 reopening was based on information allegedly available on the Insight portal and a statement of Angadiya Shri Nilesh Pranjivan Bhatia, indicating that an amount of ₹2,14,42,208 had been distributed among various beneficiaries.

The petitioners contended that the notice and order contained no material connecting them with the alleged transaction and that identical notices had been issued to several ceramic-business assessees for the same amount, without identifying the petitioner’s individual transaction.

Although the petitioners sought the underlying material, the Assessing Officer did not furnish it or undertake any independent verification before passing the order under Section 148A(3).

The Revenue opposed the petition, submitting that the Insight portal information and the Angadiya’s statement constituted sufficient material to justify reopening.

1. Whether the notice issued under Section 148A(1) and the order passed under Section 148A(3) were valid when they did not disclose material linking the petitioners to the alleged transaction or identify the petitioner-specific amount of escaped income.

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

The Court applied Sections 148, 148A(1) and 148A(3) of the Income-tax Act, 1961, which require the Assessing Officer to consider the material suggesting escapement of income, provide the assessee an opportunity of being heard, and pass a reasoned order based on relevant material.

The Court relied on the principle stated in Vasuki Global Industrial Limited v. Principal Chief Commissioner of Income Tax, [2025] 180 taxmann.com 16 (Gujarat), that the Assessing Officer must apply independent mind and verify information received through the Insight portal rather than rely upon it mechanically.

It further reaffirmed that reassessment proceedings cannot be founded on a roving or fishing inquiry based merely on unverified information and that the notice and order must disclose a clear, assessee-specific nexus between the information and the alleged escapement of income.

The Court found that neither the Section 148A(1) notice nor the Section 148A(3) order identified any specific transaction between the petitioners and the Angadiya or explained how ₹2,14,42,208 was attributable to the petitioners.

The amount was identical across multiple ceramic-business assessees, and the order merely referred to a general chart of alleged beneficiaries without showing the petitioners’ individual transaction or amount.

The Assessing Officer also failed to furnish the underlying material requested by the petitioners and did not verify the information obtained from the Insight portal.

Consequently, the statutory requirement of application of mind was not satisfied, and the reassessment process amounted to an impermissible roving and fishing inquiry.

It held that the reassessment proceedings were unsustainable because the impugned notice and order lacked material connecting the petitioners with the alleged transaction, failed to disclose the petitioner-specific escaped income, and were based on unverified Insight portal information.

The writ petition was allowed, and the notice dated 29 June 2025 and the order passed under Section 148A(3) on the same date were quashed and set aside.