Reassessment based on vague third-party information fails without a live nexus and specific recorded reasons supporting escapement.

Reassessment under section 147 requires recorded reasons showing a clear and live nexus between the material and the alleged escapement in the assessee's hands. General third-party information, without identification of the precise nature of escapement, the relevant entity, transaction details, or independent verification, does not satisfy the reason to believe standard and indicates non-application of mind. On that basis, the reassessment proceedings were invalid, and the consequential assessment and addition under section 69A were also unsustainable and set aside.

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Issues: Whether the reassessment initiated under section 147 was valid where the recorded reasons were based on general third-party information, did not identify the precise nature of alleged escapement, and lacked specific transaction details, and whether the consequential assessment and addition could survive.

Analysis: The reopening was founded on generalized information from the Investigation Wing concerning third parties, but the recorded reasons did not specify the exact nature of the alleged income escapement in the assessee's hands. The reasons also failed to identify the relevant entity, date-wise transactions, mode of transaction, or the category of alleged entries. Such a reopening, without independent verification and without a clear nexus between the information and the assessee, did not satisfy the jurisdictional requirement of reason to believe and reflected non-application of mind. Once the foundation of reassessment was found to be invalid, the assessment made in consequence of that reopening, including the addition under section 69A, could not be sustained.

Conclusion: The reassessment proceedings were invalid and were quashed. The consequential assessment and addition were also set aside, in favour of the assessee.

Ratio Decidendi: Reassessment under section 147 cannot be sustained on vague, generalized third-party information unless the Assessing Officer independently applies mind and records specific reasons showing a live nexus between the material and the alleged escapement in the assessee's hands.

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