Reassessment beyond four years fails where reopening rests on a mere change of opinion and no full disclosure breach is recorded.

Reassessment beyond four years under the proviso to Section 147 was invalid because the recorded reasons did not allege any failure by the assessee to fully and truly disclose material facts after an assessment under Section 143(3). The material relied on for reopening had already been placed in the return, tax audit report, audited accounts and computations, and was considered in the original assessment. Reopening on the same material amounted to a mere change of opinion and could not support a valid belief that income had escaped assessment. The reassessment was therefore struck down in favour of the assessee.

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Issues: Whether reopening of the assessment beyond four years was valid in the absence of any recorded failure by the assessee to disclose fully and truly all material facts; and whether the reassessment was vitiated as a mere change of opinion.

Analysis: The assessment had been completed under Section 143(3) of the Income-tax Act, 1961, so the proviso to Section 147 applied. The recorded reasons did not allege any failure on the part of the assessee to make a full and true disclosure of material facts. The material relied upon for reopening had already been disclosed in the return, tax audit report, audited accounts and computations, and the same facts had been considered during the original assessment proceedings. On those facts, the attempt to reopen rested on reappraisal of the same material and amounted to a different view on the same record.

Conclusion: The reopening was invalid and was struck down in favour of the assessee.

Final Conclusion: A reassessment initiated after four years, without alleging or establishing failure of full and true disclosure, cannot be sustained where it is founded only on a change of opinion on material already examined in the original assessment.

Ratio Decidendi: Reassessment beyond four years is barred unless the recorded reasons disclose a failure to fully and truly disclose material facts, and a mere change of opinion on the same material does not constitute reason to believe that income has escaped assessment.

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