Reassessment beyond four years fails without fresh material where reopening merely revisits a concluded disallowance issue.

Reassessment under section 147 issued beyond four years after a completed section 143(3) assessment was impermissible where the Assessing Officer had no fresh information or tangible material after the original proceedings. The proposed disallowance under section 40A(3) had already been considered, so reopening on the same material amounted to a mere change of opinion, which cannot support reassessment jurisdiction. On these facts, the reassessment notice was invalid and the reopening was quashed in favour of the assessee.

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Issues: Whether reassessment proceedings initiated beyond four years under section 147 of the Income-tax Act, 1961, for making a disallowance under section 40A(3) were valid in the absence of fresh material.

Analysis: The regular assessment had been completed under section 143(3), and the reassessment notice was issued after four years from the end of the assessment year. On the facts recorded, no fresh information or tangible material had come to the notice of the Assessing Officer after the original assessment. The reopening was therefore examined in the light of the principle that reassessment cannot be based on a mere change of opinion, and that where an issue was already considered in the original proceedings, reopening without new material is impermissible. The material relied upon did not justify invoking reassessment jurisdiction for the proposed disallowance.

Conclusion: The reassessment notice was invalid and the reopening was rightly quashed; the finding was in favour of the assessee.

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