Reassessment beyond four years fails where reopening rests on the same disclosed facts and no failure to disclose is recorded.

Second reassessment notices were invalid because they were founded on the same master licensing agreement and royalty receipts already examined in the original assessment and first reassessment. In proceedings beyond four years, reopening required a recorded failure by the assessee to disclose fully and truly all material facts necessary for assessment; no such failure was recorded. The court treated the reopening as a mere change of opinion based on reappraisal of already disclosed primary facts, and held that the Assessing Officer, not the assessee, was responsible for drawing the legal inference from those facts. The reassessment proceedings were therefore held to be without jurisdiction and the issue was decided in favour of the assessee.

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Issues: Whether the second reassessment notices and consequent reassessment proceedings were valid when they were founded on the same material already available and considered in the earlier assessment and reassessment, and no failure to disclose fully and truly all material facts was recorded.

Analysis: The material relied upon for the second reopening, including the master licensing agreement and the royalty receipts, was already on record when the original assessment and the first reassessment were completed. The Assessing Officer had consciously examined the same material earlier and accepted the assessee's position. In proceedings beyond four years, reopening required a recorded failure by the assessee to disclose fully and truly all material facts necessary for assessment. On the record, the reopening was based on a mere change of opinion and not on any new or previously undisclosed primary facts. Once all primary facts were disclosed, the duty to draw legal inferences lay with the Assessing Officer and not the assessee.

Conclusion: The second reassessment proceedings were invalid in law; the reopening failed for want of jurisdictional precondition, and the finding was in favour of the assessee.

Ratio Decidendi: Where all primary facts are already disclosed and the same material is merely reappraised, reassessment beyond the prescribed period cannot be sustained in the absence of a recorded failure to disclose fully and truly all material facts.

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