Reassessment beyond four years requires recorded failure to disclose material facts; reopening without that allegation is jurisdictionally barred.

Reassessment notice issued after four years from the end of the relevant assessment year was held invalid where the original assessment had been completed under section 143(3) and the recorded reasons did not allege any failure by the assessee to fully and truly disclose all material facts necessary for assessment. The first proviso to section 147 operates as a jurisdictional bar in such cases, so mere reference to investigation material or a need for further inquiry is insufficient. The reopening was quashed and the assessee succeeded on the jurisdictional challenge.

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Issues: Whether the reassessment initiated beyond four years from the end of the relevant assessment year was valid in the absence of any recorded allegation that the assessee had failed to fully and truly disclose all material facts necessary for assessment.

Analysis: The original assessment had been completed under section 143(3) of the Income-tax Act, 1961, and the notice for reopening was issued after expiry of four years from the end of the assessment year. The recorded reasons referred only to information received from investigation and to a belief that further inquiry was needed, but did not allege any failure on the part of the assessee to disclose fully and truly all material facts during the original assessment. In such a case, the first proviso to section 147 operates as a jurisdictional bar to reopening.

Conclusion: The reopening was invalid and was quashed; the issue was decided in favour of the assessee.

Final Conclusion: The reassessment could not be sustained, and the assessee's appeal succeeded on the jurisdictional challenge to reopening.

Ratio Decidendi: Where an assessment completed under section 143(3) is sought to be reopened after four years, the recorded reasons must show failure by the assessee to fully and truly disclose all material facts necessary for assessment; absent such allegation, the reopening is without jurisdiction.

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