Income-tax reopening needs verified material with direct nexus to the assessee; untested complaint and linked evidence failed here.

Reopening under the Income-tax Act cannot rest on unverified material lacking a direct nexus with the assessee. The High Court found that the undated complaint said to have emerged from digital data in a survey on an unrelated entity was not independently examined, its author was not summoned, and the relied-upon statements and cash-receipt image did not establish receipt of cash by the assessee or a family member. In the absence of a verified factual foundation linking the material to the assessee, the reassessment initiation was treated as conjectural, and the notices under sections 148A(1) and 148, together with the order under section 148A(3), were quashed.

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Issues: (i) Whether the notices issued under section 148A(1) and section 148 of the Income-tax Act, 1961, and the order under section 148A(3) could be sustained when the reopening was founded on an undated complaint and other material lacking direct linkage with the petitioner.

Analysis: The reopening rested on a complaint said to have been recovered from digital data in the course of a survey on an unrelated entity, but the complaint itself was not independently investigated and its author was not summoned. The material relied upon did not establish any connection between the petitioner and the entities or persons from whose devices the material was found. The statements recorded after reopening and the cash-receipt image did not show receipt of cash by the petitioner or the petitioner's family member. In the absence of a verified factual foundation and a direct nexus between the material and the petitioner, the reassessment initiation was treated as based on conjecture rather than actionable material.

Conclusion: The impugned notices and the order under section 148A(3) were unsustainable and were quashed, in favour of the assessee.

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