Reassessment reopening needs tangible material and, after four years, proof of failure to disclose fully and truly all facts.

Reassessment under Section 147 cannot rest on a mere change of view on the same material; where reopening is founded only on alleged ineligibility for Section 10B deduction without fresh tangible material, it is unsustainable. For assessments completed after four years, reopening also requires a recorded failure by the assessee to disclose fully and truly all material facts, and the absence of that jurisdictional finding or supporting material bars the notices. On both grounds, the reassessment notices and rejection of objections could not survive.

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Issues: (i) Whether reassessment under Section 147 of the Income-tax Act, 1961 could be sustained on the ground that the assessee was allegedly not eligible for deduction under Section 10B for want of approval by the specified authority. (ii) Whether the reopening was barred by limitation in the assessments completed beyond four years, in the absence of tangible material or any failure to disclose fully and truly all material facts.

Issue (i): Whether reassessment under Section 147 of the Income-tax Act, 1961 could be sustained on the ground that the assessee was allegedly not eligible for deduction under Section 10B for want of approval by the specified authority.

Analysis: The reopening was founded only on the view that the 100% EOU approval was not granted by the specified authority. The record showed that the unit had been granted permission as an EOU and that such approval was treated as valid upon ratification by the Board of Approval. No independent material was shown to justify the belief that income had escaped assessment. The reassessment thus amounted to a review of the earlier assessment on the same material.

Conclusion: The reopening on this ground was not sustainable and was against the assessee.

Issue (ii): Whether the reopening was barred by limitation in the assessments completed beyond four years, in the absence of tangible material or any failure to disclose fully and truly all material facts.

Analysis: For the assessments beyond four years, the proviso to Section 147 required a showing of failure by the assessee to disclose fully and truly all material facts. The authority did not record such failure, and no tangible material was produced to support escapement of income. In the absence of these jurisdictional facts, the reassessment notices could not be maintained. The challenge on limitation was therefore also made out for the older assessment years.

Conclusion: The reopening was barred and was against the Revenue.

Final Conclusion: The reassessment notices and the consequential rejection of objections could not survive judicial scrutiny, and the writ petitions were allowed.

Ratio Decidendi: Reassessment under Section 147 cannot be sustained in the absence of tangible material and, after four years, only if the Revenue establishes failure to disclose fully and truly all material facts; a reopening based merely on a different view of the same material is impermissible.

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