Reassessment beyond four years barred absent full and true disclosure; later change of opinion cannot justify reopening.

Reassessment notices issued beyond four years from the end of the assessment year under Section 147 are valid only if escaped income is attributable to the assessee's failure to disclose fully and truly all material facts necessary for assessment. Here, the reopening rested on a later view that the Section 10B exemption had been wrongly allowed, but there was no material showing suppression of approvals or other relevant facts by the assessees. A later legal interpretation or a different inference from the same record cannot by itself justify reopening after the statutory four-year bar. The reassessment proceedings and consequential assessment orders were therefore incompetent and were set aside.

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Issues: Whether reassessment notices issued under Section 147 of the Income-tax Act, 1961 after the expiry of four years from the end of the assessment year were valid in the absence of any failure by the assessee to disclose fully and truly all material facts necessary for assessment.

Analysis: Under the proviso to Section 147, reassessment beyond four years from the end of the relevant assessment year is permissible only where income has escaped assessment because of the assessee's failure to file a return or to disclose fully and truly all material facts necessary for assessment. The reassessment in these cases was founded on a later legal view that the exemption under Section 10B had been wrongly allowed, and there was no material to show that the assessees had withheld approvals, suppressed information, or failed to place relevant facts before the assessing authority at the time of original assessment. A later change in legal interpretation or a different inference drawn from the same materials cannot, by itself, justify reopening after the statutory four-year bar. Where the assessing authority had accepted the claim on the basis of the materials produced, the fault lies in the original inference and not in any nondisclosure by the assessee.

Conclusion: The reassessment proceedings were incompetent and the notices and consequential assessment orders were liable to be set aside. The assessee succeeded.

Ratio Decidendi: Reassessment beyond four years under Section 147 is barred unless the escapement of income is attributable to the assessee's failure to disclose fully and truly all material facts; a mere change of opinion or later legal view cannot sustain reopening.

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