The assessee’s return declaring a loss was accepted via an intimation under section 143(1). Later, the assessment was sought to be reopened by a notice under section 148, issued on 31.03.2021, based on AIR data showing high-value bank credits which had caused the case to be flagged by the Non-Filer Management System (NMS). The High Court quashed the reassessment proceedings. It held that a reopening under the unamended section 147 requires a “reason to believe” formed by the Assessing Officer based on tangible material, not merely a system-generated alert. The Court found there was no independent application of mind or a live link established between the raw information and the formation of a belief that income had escaped assessment. A reopening based on borrowed satisfaction from the NMS was held to be invalid. (AY. 2017-18)