Reassessment beyond four years fails without tangible material showing failure to disclose material facts; change of opinion is insufficient.

Reassessment notices issued beyond four years are invalid unless the recorded reasons show a live nexus between tangible material and a failure by the assessee to fully and truly disclose material facts necessary for assessment. Where the assessee had already disclosed trading transactions, profit and loss details, and supporting documents in a scrutiny assessment, reopening could not be justified on the basis of unparticularised investigation or SEBI-related information. In the absence of specific material showing what primary fact was withheld or how escapement of income was established, the reopening amounted to a mere change of opinion. The challenge to the reassessment reopening therefore succeeded in favour of the assessee.

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Issues: Whether reassessment notices issued beyond four years were valid when the assessee had disclosed all primary facts and the recorded reasons did not disclose a live link or tangible material to justify reopening.

Analysis: The notice under section 148 of the Income-tax Act, 1961 was issued after completion of scrutiny assessment under section 143(3). The objections and supporting material showed that the assessee had disclosed the relevant trading transactions, profit and loss details, and explanatory documents. Reopening after four years required a demonstrated failure to disclose fully and truly all material facts necessary for assessment. The recorded reasons relied on information from investigation sources and SEBI-related material, but did not explain what specific primary fact had been withheld or how the material independently established escapement of income. In the absence of a rational connection between the material and the belief formed, and where the objection order did not set out particulars discrediting the assessee's explanation, the reopening amounted to a change of opinion. The burden, after disclosure by the assessee, could not be shifted back without reasons showing why the disclosure was false or incomplete.

Conclusion: The reassessment reopening was invalid and the challenge succeeded in favour of the assessee.

Ratio Decidendi: Reassessment beyond four years cannot be sustained unless the recorded reasons show a live nexus between tangible material and a failure by the assessee to fully and truly disclose material facts; a mere change of opinion or unparticularised information is insufficient.

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