Independent application of mind is essential for reassessment; unverified Investigation Wing information cannot justify reopening.

Reassessment under sections 147 and 148 was held invalid where the Assessing Officer relied only on Investigation Wing information about accommodation entries and did not independently examine the material or form his own reason to believe that income had escaped assessment. The recorded reasons showed no meaningful verification or prima facie analysis linking the material to the assessee, so the notice under section 148 lacked jurisdiction. The reassessment was therefore void ab initio and the Revenue's challenge failed.

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Issues: Whether reassessment under sections 147 and 148 of the Income-tax Act, 1961 was valid where the Assessing Officer acted merely on Investigation Wing information alleging accommodation entries and did not independently apply his mind to the material before reopening the assessment.

Analysis: Reopening of assessment requires the Assessing Officer to form a bona fide belief, on the basis of relevant material, that income chargeable to tax has escaped assessment. Mere receipt of information from the Investigation Wing is not enough unless the material is examined and linked to the assessee with independent application of mind. The recorded reasons showed reliance only on the investigation report and did not demonstrate any meaningful verification or prima facie analysis by the Assessing Officer before issuing notice under section 148.

Conclusion: The reopening was invalid and the reassessment was void ab initio. This issue was decided in favour of the assessee.

Final Conclusion: The Revenue's challenge failed because the foundational jurisdiction to reopen the assessment was not established, and the remaining addition issue did not survive after the reassessment was held invalid.

Ratio Decidendi: Reassessment under sections 147 and 148 cannot be sustained unless the Assessing Officer independently applies his mind to tangible material and forms a reason to believe that income has escaped assessment; mere unverified investigation information is insufficient.

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