Reassessment invalid for mechanical reopening without independent enquiry, as inconsistent reasons failed to support belief of escaped income.

Reassessment under section 147 is invalid where the Assessing Officer merely accepts external information about alleged accommodation entries without independent enquiry or application of mind. The recorded reasons must show a rational, consistent basis for the belief that income escaped assessment; factual inconsistency in the amount received further weakens that foundation. Reopening cannot rest on vague or uncertain material alone. On these facts, the notice under section 148 and the consequent reassessment were quashed in favour of the assessee.

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Issues: Whether the reassessment under section 147 based on the recorded reasons and the notice under section 148 was valid.

Analysis: The information received by the Assessing Officer alleged that the assessee had taken a loan from a company described as a shell entity providing accommodation entries. However, the reopening was found to be based on a mechanical acceptance of the information without independent enquiry or application of mind by the Assessing Officer. The reasons recorded also reflected factual inconsistency regarding the amount received, which further undermined the basis for forming the requisite belief that income had escaped assessment. Reopening cannot rest on vague or uncertain material without the Assessing Officer first examining the information and reaching an independent belief.

Conclusion: The reassessment was invalid and the consequential assessment was quashed, in favour of the assessee.

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