Reopening beyond four years sustained where full disclosure was disputed and factual inquiry into commission payments remained unresolved.

Reopening of assessment beyond four years was upheld where the recorded reasons alleged failure to fully and truly disclose material facts necessary for assessment. The dispute turned on factual questions, including whether the foreign commission recipient had a permanent establishment in India and whether the commission was separately disclosed, and the assessee did not produce supporting material at the objections stage. The reasons also referred to differential accounting treatment between foreign and local commission and the original non-examination of tax deduction at source. On that basis, the notice was not found to be without jurisdiction at the writ stage, and the reopening notice and rejection of objections were not interfered with.

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Issues: Whether the notice for reopening of assessment beyond four years from the end of the relevant assessment year was vitiated for absence of jurisdiction, including the question whether there was failure to fully and truly disclose all material facts necessary for assessment.

Analysis: Reopening beyond four years requires the Assessing Officer to have reason to believe that income chargeable to tax has escaped assessment by reason of the assessee's failure to make a full and true disclosure of material facts. The challenge raised factual disputes as to whether the foreign commission recipient had a permanent establishment in India during the relevant year and whether the commission was separately disclosed. The Court found that these matters required factual investigation and that the petitioner had not produced supporting material at the objection stage. The recorded reasons also referred to differential treatment in accounting for foreign and local commission and the consequent non-examination of tax deduction at source during the original assessment. In these circumstances, the notice could not be held to be without jurisdiction at the writ stage.

Conclusion: The reopening notice and the order rejecting the objections were not interfered with, and the challenge failed.

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