Reassessment beyond four years fails where reopening rests on change of opinion and no failure to disclose material facts is shown.

Reassessment initiated beyond four years was invalid because the Revenue did not establish any failure by the assessee to fully and truly disclose all material facts necessary for assessment. The original scrutiny had already considered the amalgamation, carry-forward losses and unabsorbed depreciation, and the reopening was based on the same material previously examined. A later view treating the transaction as an ordinary takeover rather than an amalgamation was only a different inference from the existing record, not fresh tangible material. The reopening was therefore vitiated by change of opinion, and the reassessment notice and order rejecting objections were quashed.

---

---

Issues: Whether the reassessment notice issued beyond four years was valid in the absence of failure by the assessee to fully and truly disclose material facts, and whether the reopening was vitiated by change of opinion.

Analysis: The return was originally scrutinised and the assessment was completed after consideration of the amalgamation, the carry-forward losses and unabsorbed depreciation claimed in relation to the amalgamating company. The reassessment was initiated beyond four years from the end of the relevant assessment year, so the statutory condition attached to reopening in such cases required the Revenue to establish failure by the assessee to disclose fully and truly all material facts necessary for assessment. The reasons for reopening were founded on the same materials that had already been placed before and considered by the Assessing Officer in the original assessment. On those facts, the later view that the transaction was an ordinary takeover and not an amalgamation amounted only to a different inference from the same material, not fresh tangible material.

Conclusion: The reassessment was invalid as it was based on change of opinion and the prerequisite failure to disclose fully and truly all material facts was not established. The reopening notice and the consequential order rejecting objections were quashed.

---