Reassessment after four years fails where no failure to disclose material facts is recorded and reopening rests on a mere change of opinion.

Reassessment issued after four years from the end of the assessment year was held invalid where the original assessment had been completed under section 143(3) and the recorded reasons did not allege any failure to disclose fully and truly all material facts. The reopening was examined only on the recorded reasons, which incorrectly assumed an assessment under section 143(1) and were unsupported by fresh tangible material linking any material to a belief of escapement of income. On those facts, the notice under section 148 was treated as a mere change of opinion and without jurisdiction, so the reassessment proceedings were quashed and the addition could not survive.

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Issues: Whether the reassessment notice and consequent reassessment for the assessment year 2008-09, issued after four years from the end of the assessment year and following an assessment under section 143(3), were valid in the absence of any recorded allegation of failure to disclose fully and truly all material facts and in the absence of tangible material, or whether they were vitiated as a mere change of opinion.

Analysis: The reopening was examined only on the basis of the reasons recorded. The original assessment had been completed under section 143(3), so the proviso to section 147 applied. The recorded reasons proceeded on a mistaken assumption that the original assessment was under section 143(1), and they did not state that escapement of income was attributable to any failure by the assessee to make a full and true disclosure. The reopening was also not supported by any fresh tangible material demonstrating a live link between the material available and the belief that income had escaped assessment. In these circumstances, the notice under section 148 was held to be founded on a mere change of opinion and therefore without jurisdiction.

Conclusion: The reassessment proceedings were invalid and were quashed. The reopening was held to be bad in law and the addition could not survive.

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