Reassessment beyond four years requires specific recorded failure of full and true disclosure, not mere escapement of income.

Reassessment notice issued beyond four years from the end of the assessment year is valid only if the recorded reasons show that income escaped assessment because the assessee failed to disclose fully and truly all material facts. Mere escapement of income is not enough. On the facts discussed, the assessee had disclosed the relevant deduction claims, excise duty payments, Modvat adjustment, and supporting working statements, so any mistake arose from the Assessing Officer's understanding rather than from nondisclosure by the assessee. The recorded reasons therefore did not satisfy the jurisdictional condition for reopening, and the notice under section 148 was treated as without jurisdiction.

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Issues: Whether a notice under section 148 of the Income-tax Act, 1961, issued beyond four years from the end of the assessment year was valid when the recorded reasons did not establish failure by the assessee to disclose fully and truly all material facts necessary for assessment, and whether the assessee's disclosure regarding excise duty and Modvat credit was deficient.

Analysis: For a reassessment initiated after the expiry of four years, the proviso to section 147 requires not only a reason to believe that income has escaped assessment, but also a recorded basis showing that such escapement was by reason of the assessee's failure to make a return or to disclose fully and truly all material facts. Mere escapement of income is insufficient. The materials placed before the Assessing Officer showed complete disclosure of the relevant facts relating to deduction claims, excise duty payments, Modvat adjustment, and the supporting working statements. Any error in treating the disclosed figures or in understanding the Modvat adjustment was attributable to the Assessing Officer and not to any omission by the assessee. The recorded reasons therefore did not satisfy the jurisdictional precondition for reopening after four years.

Conclusion: The notice under section 148 was without jurisdiction and could not be sustained; the reopening failed in favour of the assessee.

Ratio Decidendi: Where reassessment is sought after four years from the end of the assessment year, the Assessing Officer must record a live and specific basis showing that escapement of income occurred because of the assessee's failure to disclose fully and truly all material facts; absent such material, the notice is void for want of jurisdiction.

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