Reopening based on seized register entries without live nexus to the assessee was held invalid and quashed.

A notice issued under section 148 of the Income-tax Act, 1961 was quashed because the reopening rested on a seized inquiry register entry that did not establish any live nexus with the assessee. The entry predated the assessee's purchase, covered different survey numbers and a much larger area, and named a third person. The broker's statement also showed the register contained details of land or plots available for sale, which weakened reliance on the presumption under section 292C. On these facts, the material disclosed only conjecture and not information suggesting escapement of income, so the reopening was invalid.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 was valid when the sole material was a seized inquiry register entry predating the assessee's purchase, covering multiple survey numbers and a larger area, and not showing any direct or indirect link with the assessee.

Analysis: The reopening was founded on a seized inquiry register recovered in a search of a broker's premises. The entry relied upon was dated 10.03.2019, whereas the assessee's sale deed for the relevant land was executed on 26.02.2021. The entry described land or plots available for sale and did not record any concluded transaction by the assessee. The searched person's statement under section 131 of the Income-tax Act, 1961 also indicated that the registers contained details of land or plots available for sale, and his admissions weakened any blanket reliance on the presumption under section 292C of the Income-tax Act, 1961. The register entry additionally covered survey numbers 753/1+2+3 and 756/1+2 with a total area far larger than the land actually purchased by the assessee, and the name appearing in the register was of a third person unconnected with the assessee. On these facts, there was no live nexus between the seized material and the assessee, and the reopening was based only on conjectural inference rather than material showing information suggesting escapement of income.

Conclusion: The notice under section 148 of the Income-tax Act, 1961 was invalid and was quashed; the issue was decided in favour of the assessee.

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