Reassessment beyond four years requires failure to disclose material facts, not a mere change of opinion.

Reassessment beyond four years is invalid unless escapement of income is attributable to the assessee's failure to disclose fully and truly all material facts. Here, the assessee had placed the relevant computation details, including carried-forward losses and income figures, before the Assessing Officer, and the reopening materials did not show any independent basis for alleging suppression. In the absence of tangible material establishing such failure, the jurisdictional condition under the proviso to Section 147 was not met. The HC also applied the rule that reassessment cannot proceed on a mere change of opinion. The reopening was therefore barred by limitation and set aside in favour of the assessee.

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Issues: Whether reassessment initiated beyond four years under the proviso to Section 147 of the Income-tax Act, 1961 was valid when the assessee had disclosed the relevant computation details and there was no allegation of failure to disclose fully and truly all material facts.

Analysis: Reopening under Section 147 after the expiry of four years is permissible only where income has escaped assessment by reason of the assessee's failure to make a full and true disclosure of all material facts. The notice and reopening materials did not disclose independent reasons showing such failure. The record showed that the details of carried-forward losses and income computation were before the Assessing Officer. In the absence of any allegation or material showing suppression of facts, the jurisdictional condition for reopening beyond four years was not satisfied. The principle that reassessment cannot be used as a mere change of opinion and must rest on tangible material was applied.

Conclusion: The reopening was barred by limitation and invalid. The appeal was allowed in favour of the assessee.

Ratio Decidendi: Reassessment beyond four years under the proviso to Section 147 of the Income-tax Act, 1961 is sustainable only when escapement of income is attributable to the assessee's failure to disclose fully and truly all material facts, supported by tangible material and not by a mere change of opinion.

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