Reopening beyond four years fails where reassessment rests on already disclosed material and amounts to a change of opinion.

Reopening of assessment beyond four years under section 147 was invalid because the recorded reasons relied on material already available in the original return, tax audit report and assessment records. In the absence of any allegation or material showing failure to disclose fully and truly all material facts, the first proviso to section 147 barred reassessment. The court held that reopening on the same material amounted to a change of opinion, and the mere absence of discussion in the original assessment order did not justify an inference that the issue had not been examined. The reopening was quashed as time-barred.

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Issues: Whether reopening of assessment beyond four years under section 147 of the Income-tax Act, 1961 was valid when the material relied upon was already available in the original assessment records and there was no allegation of failure to disclose fully and truly all material facts.

Analysis: The reassessment notice was issued after the expiry of four years from the end of the relevant assessment year, so the first proviso to section 147 applied. In that situation, reopening could be sustained only if income had escaped assessment because of the assessee's failure to disclose fully and truly all material facts necessary for assessment. The reasons recorded for reopening referred to amounts already shown in the profit and loss account and to information that was already on record in the tax audit report and the original return. No fresh tangible material had come to light after the assessment. The attempt to reopen was therefore founded on a different view of the same material already considered, which amounted to a change of opinion. Mere absence of discussion of a point in the original assessment order did not show that the point had not been examined or that the assessee had withheld material facts.

Conclusion: The reopening was invalid, barred by limitation, and liable to be quashed; the assessee succeeds.

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