Reassessment beyond four years fails when based on a mere change of opinion without new material or nondisclosure of primary facts.

Reassessment beyond four years cannot rest on a mere change of opinion where the original assessment had already examined the relevant receipts, treaty position, and taxability issues. In the absence of new factual material, a later reassessment based only on a different inference from the same disclosed facts is invalid. The assessee's duty is to disclose primary material facts, not the legal conclusion to be drawn from them. Where the record shows full disclosure and consideration of those facts in the original proceedings, the proviso to Section 147 is not satisfied and reopening is not justified. The reassessment notice and rejection of objections were quashed.

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Issues: (i) Whether reopening of the assessment was invalid as a mere change of opinion on the same material. (ii) Whether the assessee had failed to disclose fully and truly all material facts relevant to the assessment so as to justify reassessment beyond four years.

Issue (i): Whether reopening of the assessment was invalid as a mere change of opinion on the same material.

Analysis: The original assessment had specifically examined the taxability of the software-related receipts, the existence of a permanent establishment, the applicable treaty article, and the relevant provisions of the Income-tax Act. The reassessment reasons did not refer to any new factual material discovered after the original assessment. They only reflected a different legal inference from the same disclosed facts, which could not sustain reopening.

Conclusion: The reopening was invalid as it was based on a change of opinion.

Issue (ii): Whether the assessee had failed to disclose fully and truly all material facts relevant to the assessment so as to justify reassessment beyond four years.

Analysis: Since the notice was issued after four years, the proviso to Section 147 applied. The record showed that the relevant receipts and supporting materials were disclosed during the original assessment proceedings, and the Assessing Officer had considered them in detail. The law required disclosure of primary material facts, not the legal conclusion to be drawn from them. No new concealed fact was shown to have come to the Assessing Officer's notice later.

Conclusion: There was no failure by the assessee to make a full and true disclosure of material facts.

Final Conclusion: The reassessment notice and the order rejecting objections were quashed, and the writ petition was allowed.

Ratio Decidendi: Where an assessment has already been completed after examination of the relevant facts, reassessment beyond four years cannot be sustained in the absence of new material or failure by the assessee to disclose fully and truly the primary facts; a mere change of opinion on the same material is insufficient.

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