Reassessment beyond four years fails absent failure to disclose material facts; mere change of opinion cannot justify reopening.

A reassessment notice issued beyond four years from the end of the relevant assessment year is invalid unless the revenue also shows failure by the assessee to make a return or to disclose fully and truly all material facts necessary for assessment. Where the original assessment was completed under section 143(3) and there is no such allegation or supporting material, reopening cannot be sustained. Reappraisal of the same material already before the Assessing Officer amounts only to a change of opinion, which does not confer jurisdiction under sections 147 and 148. The reassessment was therefore quashed as beyond jurisdiction.

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Issues: Whether the reopening of assessment under sections 147 and 148 of the Income-tax Act, 1961, after the expiry of four years from the end of the relevant assessment year, was valid in the absence of any allegation of failure by the assessee to disclose fully and truly all material facts and where the reopening was based on a change of opinion.

Analysis: The assessment had already been completed under section 143(3) of the Income-tax Act, 1961, and the notice under section 148 was issued beyond four years from the end of the relevant assessment year. In such a case, the first proviso to section 147 requires not only reason to believe that income has escaped assessment, but also a belief that such escapement occurred because of the assessee's failure to make a return or to disclose fully and truly all material facts necessary for assessment. The record showed no allegation or material suggesting any such failure by the assessee. On the contrary, the very basis of the reopening arose from a reappraisal of the same material already available to the Assessing Officer, which amounted to a mere change of opinion. Reopening on that basis was therefore beyond jurisdiction.

Conclusion: The reopening under sections 147 and 148 was invalid, and the quashing of the reassessment was in law. The issue was decided in favour of the assessee.

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