Reopening of assessment cannot rest on unverified portal information lacking assessee-specific material.

The petitioner, a ceramics business operating in Morbi, 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 a statement of Angadiya Shri Nilesh Pranjivan Bhatia, allegedly indicating distribution of ₹2,14,42,208 among various assessees.

The petitioner contended that the notice and order did not disclose any material connecting it with the alleged transaction or establish the amount allegedly attributable to it.

It was further submitted that several similarly situated ceramic dealers had received notices containing identical allegations and amounts, while another Assessing Officer having jurisdiction over other ceramic dealers had not initiated reopening proceedings in the absence of ascertainable, assessee-specific escapement.

The respondents defended the reopening on the ground that the Insight portal information and the Angadiya’s statement constituted sufficient information suggesting escapement of income.

1. Whether the notice under Section 148 and the order under Section 148A(3) were legally sustainable when they failed to disclose material linking the petitioner to the alleged Angadiya transaction or identifying the petitioner-specific escaped income.

2. Whether the Assessing Officer could rely solely on unverified information from the Insight portal and undertake reopening proceedings without independently applying his mind and supplying the underlying material to the petitioner.

3. Whether the High Court should exercise its writ jurisdiction at the pre-assessment stage notwithstanding the respondents’ contention that the petitioner should participate in the assessment proceedings.

The Court applied Sections 148 and 148A of the Income-tax Act, 1961, which require a legally sustainable basis and due consideration of relevant material before issuance of a reassessment notice.

The Assessing Officer must apply independent mind to information suggesting escapement of income, verify its relevance and genuineness, and disclose material sufficient to establish a rational link between the information and the assessee.

A reopening proceeding cannot be founded on a roving or fishing inquiry based merely on unverified information available on the Insight portal.

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 cannot blindly rely on information received through the Insight portal without verification and application of mind.

The Court found that the notice under Section 148A(1) contained no material connecting the petitioner with the alleged transaction involving Shri Nilesh Pranjivan Bhatia or demonstrating how ₹2,14,42,208 was attributable to the petitioner.

Although the order under Section 148A(3) referred to a chart of alleged beneficiaries, it did not identify the petitioner’s transaction or disclose the petitioner-specific amount of alleged escapement.

The Assessing Officer also failed to supply the underlying material and did not undertake any verification of the Insight portal information.

The identical amount attributed to multiple ceramic dealers, coupled with the absence of a transaction-wise correlation, demonstrated that the reopening was based on generic and unverified information rather than a reasoned application of mind.

Accordingly, the proceedings amounted to an impermissible roving and fishing inquiry.

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.