Reassessment beyond four years fails without disclosed material facts or fresh tangible evidence after scrutiny assessment.

Reopening beyond four years after a completed scrutiny assessment under section 143(3) is valid only where the recorded reasons show a specific failure by the assessee to disclose fully and truly all material facts. Where the audited accounts and return records already disclosed the project expenses written off, and the reasons rely on the same material without fresh tangible evidence, the proviso to section 147 is not satisfied. A reassessment on that basis amounts to a mere change of opinion and cannot stand. The reopening was held invalid, the reassessment was quashed, and the addition challenge became academic.

---

---

Issues: Whether reopening of the assessment under section 147 of the Income-tax Act, 1961, beyond four years from the end of the relevant assessment year was valid when the original assessment had been completed under section 143(3) and the recorded reasons did not identify any failure by the assessee to disclose fully and truly all material facts.

Analysis: The audited accounts and accompanying records showed that the project expenses written off had been disclosed in the return proceedings and formed part of the material before the Assessing Officer in the original scrutiny assessment. The reasons recorded for reopening proceeded on the same set of facts already available in the assessment record and did not point out any specific material fact suppressed by the assessee. In such a case, the proviso to section 147 requires a demonstrable failure of disclosure, and a mere reiteration that income had escaped assessment is insufficient. A reopening on the same material, without fresh tangible material and after a completed scrutiny assessment, amounts to a relook of the earlier decision and is impermissible.

Conclusion: The reopening was invalid and the reassessment proceedings were quashed in favour of the assessee.

Final Conclusion: Since the reassessment itself could not be sustained, the challenge to the addition on merits became academic and the assessee obtained complete relief in the appeal.

Ratio Decidendi: Where a scrutiny assessment has already been completed under section 143(3), reassessment beyond four years can be sustained only if the recorded reasons specifically show failure by the assessee to disclose fully and truly all material facts; absent such disclosure failure and absent fresh tangible material, reopening is invalid and amounts to a mere change of opinion.

---