Reassessment jurisdiction fails where recorded reasons rely on third-party information without a live nexus to the assessee's transactions.

Reassessment under section 147 was held invalid because the recorded reasons rested on general third-party information about alleged accommodation entries without specific linkage to the assessee. The ITAT noted that the reopening material did not identify any particular transaction, entry, bank trail, or documentary nexus showing receipt of the alleged amount, and a mere reference to the assessee as a possible beneficiary was insufficient. In the absence of independent application of mind and tangible material creating a live nexus with alleged escapement of income, the statutory jurisdiction for reassessment was not satisfied, and the challenge to reopening succeeded.

---

---

Issues: Whether the reassessment initiated under section 147 of the Income-tax Act, 1961 was valid when the recorded reasons were based on general third-party information without specific linkage to the assessee's transactions.

Analysis: The reopening was founded on information from the Investigation Wing and the Insight Portal regarding alleged accommodation entries by certain entry operators. However, the recorded reasons did not identify any specific transaction, entry, bank trail, or direct documentary nexus showing that the assessee had actually received the alleged accommodation entry amount. Mere reference to the assessee as a possible beneficiary, without independent application of mind to the assessee's own material and without prima facie linkage between the information and the escapement belief, was held insufficient to satisfy the statutory requirement for reassessment jurisdiction.

Conclusion: The reassessment was invalid and the challenge to the reopening succeeded in favour of the assessee.

Ratio Decidendi: Reassessment under section 147 cannot be sustained on borrowed information alone unless the recorded reasons disclose specific, tangible material establishing a live nexus between the material relied upon and the assessee's alleged escapement of income.

---