The ITAT held that the Assessing Officer (AO) had incorrectly...

The ITAT held that the Assessing Officer (AO) had incorrectly assumed facts while reopening the assessment u/s 147, leading to an erroneous belief of income escaping assessment. The assessee had already undergone scrutiny assessment u/s 143(3), disclosed share application receipts, and provided relevant details accepted by the AO. Despite adverse information from the CIT(A), the AO failed to conduct a preliminary inquiry and relied on incorrect assumptions. Mere adverse information triggers 'reason to suspect' but not the 'reason to believe' required for reopening assessment. The AO did not record proper reasons after examining material. Consequently, the notice issued u/s 148 was vitiated, held bad in law, and quashed by the ITAT, allowing the assessee's appeal.