Reassessment beyond four years requires recorded failure to disclose material facts; absent that jurisdictional averment, reopening is invalid.

Reassessment initiated after four years from the end of the relevant assessment year is valid only if the recorded reasons expressly allege that the assessee failed to disclose fully and truly all material facts necessary for assessment. Where the original assessment was completed under section 143(3) and the section 148 notice was issued beyond four years, the absence of that jurisdictional allegation in the recorded reasons is fatal to reopening. The reassessment initiation was therefore invalid and quashed.

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Issues: Whether reassessment initiated beyond four years from the end of the relevant assessment year was valid in the absence of a recorded allegation that the assessee had failed to disclose fully and truly 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 under section 148 was issued after the expiry of four years. In such cases, the proviso to section 147 permits reopening only where the reasons recorded expressly disclose failure on the part of the assessee to make a true and full disclosure of material facts. The recorded reasons did not contain that jurisdictional allegation. The reassessment was therefore tested against the mandatory precondition for assuming jurisdiction after four years, and the omission was held to be fatal.

Conclusion: The reassessment initiation was held to be invalid and was quashed, in favour of the assessee.

Ratio Decidendi: Where reassessment is initiated after four years from the end of the relevant assessment year, the recorded reasons must expressly allege failure by the assessee to disclose fully and truly all material facts; in the absence of such jurisdictional averment, the reopening is invalid.

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