Reassessment beyond four years needs full disclosure failure, and section 80-I deduction is capped only by gross total income.

Reassessment under section 147 beyond four years after a section 143(3) assessment is barred unless the Revenue shows failure by the assessee to disclose fully and truly all material facts; where the relevant particulars were already disclosed, reopening is invalid. On Chapter VI-A deductions, section 80-I deduction once computed for the eligible industrial undertaking is subject only to the overall ceiling under section 80A(2), read with section 80B(5) defining gross total income, and the components of gross total income are not to be reopened to further reduce the deduction.

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Issues: (i) Whether reassessment under section 147 was valid when the original assessment had been completed under section 143(3) and the reopening was made after four years; (ii) Whether deduction under section 80-I could be restricted by excluding items already forming part of the gross total income while applying sections 80A(2) and 80B(5).

Issue (i): Whether reassessment under section 147 was valid when the original assessment had been completed under section 143(3) and the reopening was made after four years.

Analysis: The original assessment had been completed under section 143(3), and the reopening was beyond four years. The material on record showed that the relevant income particulars were disclosed during the original proceedings, and no failure to disclose fully and truly all material facts was established. In such a situation, the proviso to section 147 barred reassessment after the expiry of four years.

Conclusion: The reassessment was invalid and the reopening was held to be bad in law, in favour of the assessee.

Issue (ii): Whether deduction under section 80-I could be restricted by excluding items already forming part of the gross total income while applying sections 80A(2) and 80B(5).

Analysis: The eligible deduction under section 80-I had already been computed for the industrial undertaking. At the stage of applying the overall ceiling under section 80A(2), the aggregate deduction cannot exceed the gross total income, and section 80B(5) defines gross total income as the total income computed before Chapter VI-A deductions. Once the deduction is determined for the eligible unit, the components of gross total income are not to be re-examined for reducing the ceiling under section 80A(2).

Conclusion: The assessee was entitled to restriction of deduction only up to the gross total income, and the Revenue's challenge failed, in favour of the assessee.

Final Conclusion: The reassessment was annulled and the disallowance of the Revenue's proposed restriction on the section 80-I deduction was rejected, leaving the assessee's relief intact.

Ratio Decidendi: Where a reassessment is initiated beyond four years from the end of the relevant assessment year after a section 143(3) assessment, it is permissible only if failure to disclose fully and truly all material facts is shown; and while applying the Chapter VI-A ceiling, the deduction already computed for the eligible source cannot be recomputed by re-opening the components of gross total income.

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