Reassessment reopening needs independent reason to believe; uncorroborated Investigation Wing information cannot sustain section 148 action.

Reassessment under section 148 requires a live nexus between tangible material and the Assessing Officer's independent reason to believe that income has escaped assessment; reopening based only on Investigation Wing information, without corroboration, verification, or quantified escapement, is treated as borrowed satisfaction and invalid. On the section 143(2) issue, the Tribunal stated that the notice requirement arises only when a return is filed in response to the section 148 notice, so no separate defect arose where no return was filed. The reassessment notice and order were quashed, and the additions did not survive.

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Issues: (i) Whether the reassessment proceedings were validly initiated under section 148 of the Income-tax Act, 1961 on the basis of information from the Investigation Wing without independent application of mind and corroborative material. (ii) Whether absence of a notice under section 143(2) vitiated the reassessment where no return was filed in response to the notice under section 148.

Issue (i): Whether the reassessment proceedings were validly initiated under section 148 of the Income-tax Act, 1961 on the basis of information from the Investigation Wing without independent application of mind and corroborative material.

Analysis: The reasons recorded for reopening were found to be undated and based only on information from the Investigation Wing regarding alleged accommodation entries. The Assessing Officer had not shown any independent verification, corroborative enquiry, quantification of escaped income, or nexus between the material and the formation of belief that income had escaped assessment. In the absence of a live link between tangible material and the recorded reasons, the reopening was held to rest on borrowed satisfaction and not on a valid reason to believe.

Conclusion: The reopening under section 148 was invalid and the notice, along with the reassessment order, was quashed in favour of the assessee.

Issue (ii): Whether absence of a notice under section 143(2) vitiated the reassessment where no return was filed in response to the notice under section 148.

Analysis: The Tribunal held that section 143(2) is attracted only where a return is filed in response to the statutory notice or under the relevant return-filing framework. Since the assessee did not file a return pursuant to notice under section 148, the requirement of issuing notice under section 143(2) did not arise on the facts of the case.

Conclusion: No separate illegality was found on this ground in favour of the assessee, but the appeal succeeded on the reassessment validity issue.

Final Conclusion: The reassessment proceedings having been held unsustainable, the additions did not survive and the assessee succeeded on the legal challenge to reopening, while the merits were left unadjudicated.

Ratio Decidendi: Reassessment under section 148 requires a live nexus between tangible material and the Assessing Officer's independent reason to believe that income has escaped assessment; reopening based solely on uncorroborated third-party information without application of mind is invalid.

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