Independent application of mind is required for reassessment; mere Investigation Wing information cannot justify reopening without a live nexus.

Reassessment under section 147 cannot be sustained on mere Investigation Wing information or borrowed satisfaction; the Assessing Officer must independently apply his mind to tangible material and record reasons showing a live nexus with the belief that income has escaped assessment. Because the recorded reasons did not explain the alleged bogus share capital or the connection of the entry provider with the assessee, the reopening lacked valid jurisdiction and the reassessment was void ab initio.

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Issues: Whether the reopening of assessment under section 147 of the Income-tax Act, 1961 was valid when it was based only on information from the Investigation Wing and not on independent application of mind to material showing escapement of income.

Analysis: The reassessment was initiated on the basis of information said to have been received from the Investigation Wing regarding alleged accommodation entries. The reasons recorded did not explain how the assessee was found to have received bogus share capital, nor did they disclose the manner in which the alleged entry provider was connected with the assessee's transaction. The existence of an assessment of the alleged entry provider on the same date, without any adverse finding against it, reinforced that the reopening rested only on borrowed satisfaction. A valid reopening required the Assessing Officer to apply his own mind to relevant material and form an independent belief that income had escaped assessment.

Conclusion: The reopening under section 147 was invalid and the reassessment was void ab initio; the assessment was quashed in favour of the assessee.

Final Conclusion: The jurisdiction assumed for reassessment was not sustained, and the entire assessment founded on such reopening was annulled.

Ratio Decidendi: Reassessment under section 147 cannot be sustained unless the Assessing Officer independently applies his mind to tangible material and records reasons showing a live nexus between that material and the belief that income has escaped assessment; mere reliance on Investigation Wing information is insufficient.

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