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of <h1>Reopening of assessment based on seized third-party document found vague and unsustainable, assessment reopening quashed and appeal allowed</h1> Reopening of assessment was challenged on the basis that information relied upon was vague and derived from a seized third-party document which contained ... Reopening of assessment - reasons to believe - vague information allegedly connected from the seized document from third party - sale of land at high prices within span of three months - HELD THAT:- The questions and answers forming part of the statements recorded under the provisions of 131 of the IT Act, in the case of one Shri Nagjibhai Bhavadiya, the searched person, does not in any manner mention the name of the petitioners. Thus, we do not find any direct or indirect link with the seized document and the same does not even remotely connect the rate mentioned of the concerned question of land with the petitioner. Thus, the revenue has attempted to reopen the assessment year 2021-22 only on the basis of some vague information allegedly connected from the seized document and the same does not in any manner relates to the present petitioner. Thus, the invocation of the proceedings u/s 148 of the IT Act, itself is ill conceived and unsustainable in light of the information contained in the seized document. Assessee appeal allowed. Issues: Whether the issuance of notice under Section 148 of the Income-tax Act, 1961 for A.Y. 2021-22, based on an extract of an inquiry register seized during search proceedings (and the Assessing Officer's satisfaction note approved under Explanation 2 clause (iv) to Section 148), is valid where the seized extract does not directly or indirectly connect the information to the assessee.Analysis: The Court examined the seized extract from search proceedings and compared its contents with the petitioner's sale deed and related record. The seized entry bore a date after the petitioner's sale, recorded the land status as non-agricultural whereas the petitioner's sale deed showed agricultural status, and named a different seller. Statements recorded under Section 131 did not mention the petitioner. In these circumstances the Court analysed whether the material relied upon by the Assessing Officer established the requisite nexus and reasonable satisfaction to reopen assessment under Section 148. The Court found that the seized extract was vague, inconsistent with the petitioner's documentary record, and lacked any direct or indirect link to the petitioner, thus amounting to conjecture rather than material capable of constituting a valid satisfaction for reopening.Conclusion: The notice under Section 148 of the Income-tax Act, 1961 dated 31.03.2025 is quashed and set aside insofar as it relates to the petitioner; the reopening was founded on conjectures and surmises and is unsustainable. The writ petition is allowed in favour of the assessee.
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