Reopening beyond four years requires full and true disclosure failure; a fresh inference from disclosed facts is insufficient.

Reopening of a completed assessment beyond four years was held invalid because the assessee had already disclosed the relevant particulars fully and truly during scrutiny assessment. The Assessing Officer's later view that tax should have been deducted under Section 194H and that disallowance followed under Sections 40(a)(ia) and 37(1) amounted only to a fresh inference from the same material. In the absence of any demonstrable failure to disclose material facts, the jurisdiction to reassess could not be invoked, and the notice under Section 148 was quashed.

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Issues: Whether the notice reopening the completed assessment beyond four years was valid in the absence of any failure by the assessee to fully and truly disclose material facts necessary for assessment.

Analysis: The return was scrutinised under Section 143(3) and the assessee had furnished the relevant particulars regarding commission or remission payments, brokerage receipts, remisiers, and the basis on which the deductions were claimed. The reopening was founded on the Assessing Officer's subsequent view that tax was deductible under Section 194H and that disallowance was warranted under Section 40(a)(ia) and Section 37(1). In a case where four years had elapsed, reassessment could be sustained only if there was a failure on the part of the assessee to disclose fully and truly all material facts. The record did not show any such omission. The reliance placed on the Ahmedabad Stock Exchange bye-laws was also found inapplicable on the facts since no relevant transaction with that exchange was established for the year in question.

Conclusion: The reopening was invalid and the impugned notice under Section 148 was quashed; the issue was decided in favour of the assessee.

Final Conclusion: Reassessment proceedings initiated after the expiry of four years could not be sustained on the basis of a mere fresh inference from already disclosed facts, and the completed assessment was protected from reopening.

Ratio Decidendi: Where an assessment is reopened beyond four years, the jurisdiction under Section 147 can be exercised only upon a demonstrable failure by the assessee to fully and truly disclose all material facts; a reassessment based only on a later view of the same disclosed material is impermissible.

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