Reopening after four years cannot rest on a mere change of opinion when the issue was already examined in scrutiny assessment.

Reopening of a scrutiny assessment completed under section 143(3) after four years was impermissible where the same cash-deposit material had already been examined, the assessee had explained it with affidavit and bank records, and the Assessing Officer had accepted that explanation in the original assessment. In such circumstances, reassessment required a jurisdictional basis that income had escaped assessment because of failure to fully and truly disclose all material facts. A later notice on the same material amounted to a mere change of opinion and was without jurisdiction. The reassessment was therefore invalid and the setting aside of the reopening was sustained in favour of the assessee.

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Issues: Whether reopening of an assessment completed under section 143(3) of the Income-tax Act, 1961, after four years was valid when the same material had been examined in the original assessment and no failure to disclose fully and truly all material facts was shown.

Analysis: The assessment record showed that the Assessing Officer had specifically examined the cash deposits in the bank account during the original scrutiny proceedings, called for an explanation, and accepted the assessee's explanation after verification, including the affidavit and supporting bank records. In such a case, reopening after the expiry of four years required a jurisdictional satisfaction that income had escaped assessment because of the assessee's failure to make a full and true disclosure of all material facts. As the reassessment was founded on the same material and the earlier assessment had already formed an opinion on the issue, the subsequent notice amounted to a mere change of opinion. The reassessment was therefore without jurisdiction and could not be sustained.

Conclusion: The reopening was invalid and the reassessment was rightly set aside in favour of the assessee.

Ratio Decidendi: Where an issue was examined in the original scrutiny assessment and accepted on the same material, reassessment beyond four years is impermissible unless the Revenue establishes the assessee's failure to fully and truly disclose all material facts; a later attempt to take a different view is a mere change of opinion.

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