Reassessment after four years requires failure to disclose material facts; reopening on already disclosed material is invalid.

Reassessment under section 147 after four years from the end of the relevant assessment year requires a showing that the assessee failed to disclose fully and truly all material facts necessary for assessment. Where the original assessment was completed under section 143(3) and reopening is based on the same material already on record, a mere change of view on disclosed facts does not satisfy the proviso to section 147. On those facts, the reopening was treated as invalid for want of jurisdiction and the reassessment was quashed.

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Issues: Whether reassessment proceedings under section 147 of the Income-tax Act, 1961 could be initiated after expiry of four years from the end of the relevant assessment year in the absence of failure by the assessee to disclose fully and truly all material facts.

Analysis: The original assessment had been completed under section 143(3) of the Income-tax Act, 1961, and the recorded reasons for reopening were based on the same material already on record, namely the assessee's claim of deduction under sections 80HHC and 80-IA. The reopening did not point to any omission or failure on the part of the assessee to make full and true disclosure of material facts necessary for assessment. In such a situation, where the proviso to section 147 applies, reassessment cannot be sustained merely on a different view of the same disclosed facts.

Conclusion: The reopening was not valid, and the reassessment proceedings were rightly quashed for want of jurisdiction.

Final Conclusion: The Revenue's challenge failed, and the dismissal of the appeal left the order quashing the reassessment undisturbed.

Ratio Decidendi: Where an assessment completed under section 143(3) is sought to be reopened after four years, reassessment is impermissible unless escapement of income is attributable to the assessee's failure to disclose fully and truly all material facts; a reopening based only on disclosed material amounts to an invalid exercise of jurisdiction.

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