Reassessment after four years requires recorded failure to disclose material facts and cannot rest on a mere change of opinion.

Reassessment notice issued after four years is invalid unless the recorded reasons themselves show that the assessee failed to disclose fully and truly all material facts necessary for assessment; later affidavits or arguments cannot supply that defect. Where the original assessment had already examined the same material and recorded the assessee's status for the project, reopening on identical facts amounts to a mere change of opinion and cannot sustain jurisdiction under the reassessment provisions. An order rejecting objections also cannot rest on a later appellate view that has been reversed or is otherwise not binding on the authority considering reopening.

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Issues: (i) Whether reassessment notices issued beyond four years from the end of the relevant assessment year were valid in the absence of any recorded allegation that the assessee failed to disclose fully and truly all material facts necessary for assessment; (ii) Whether the reassessment was impermissible as being based merely on a change of opinion and whether the impugned rejection of objections could stand in view of the earlier assessment record and the later appellate finding.

Issue (i): Whether reassessment notices issued beyond four years from the end of the relevant assessment year were valid in the absence of any recorded allegation that the assessee failed to disclose fully and truly all material facts necessary for assessment.

Analysis: Where an assessment has already been completed under section 143(3) of the Income-tax Act, 1961 and the notice under section 148 is issued after four years, the first proviso to section 147 requires a failure by the assessee to disclose fully and truly all material facts necessary for assessment. The recorded reasons must themselves disclose such failure and cannot be supplemented by later affidavits or arguments. On the record, the assessee had disclosed the relevant annual report, tax audit report, replies to queries, and the governmental resolutions and notifications showing the basis on which the Navi Mumbai Project was treated as an agency activity.

Conclusion: The reassessment notice was invalid and the assessee succeeded on this issue.

Issue (ii): Whether the reassessment was impermissible as being based merely on a change of opinion and whether the impugned rejection of objections could stand in view of the earlier assessment record and the later appellate finding.

Analysis: The assessment proceedings had specifically examined the assessee's status in relation to the Navi Mumbai Project, and the original assessment order recorded a finding that the assessee acted as an agent of the Government of Maharashtra. Reopening on the same material amounted to a change of opinion, which cannot confer jurisdiction under section 147. The later order rejecting objections also could not rely on a view for a subsequent year once that view had been reversed by the appellate tribunal, since the tribunal's order was binding on the authority considering the objections.

Conclusion: The reassessment was based on a change of opinion and the impugned order rejecting objections was unsustainable, both in favour of the assessee.

Final Conclusion: The notice for reassessment and the order rejecting objections were quashed, and the writ petition was allowed with no order as to costs.

Ratio Decidendi: For a reassessment initiated after four years, the recorded reasons must expressly show failure to disclose fully and truly all material facts, and where the original assessment has already considered the very issue sought to be reopened, jurisdiction cannot be sustained on a mere change of opinion.

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