Reassessment after four years barred where recorded reasons do not allege full and true disclosure failure and issue was already examined.

A reassessment notice issued after four years is valid only if the recorded reasons themselves allege that the assessee failed to fully and truly disclose all material facts. Here, the reasons recorded contained no such allegation and relied on material already furnished during the original proceedings. The deduction issue had also been specifically queried, answered, and considered in the assessment order. On these facts, reopening on the same material was an impermissible review of the earlier assessment and amounted to a change of opinion. The HC therefore quashed the reassessment notice.

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Issues: Whether a notice for reassessment issued after four years from the end of the relevant assessment year was valid in the absence of any recorded allegation that the assessee failed to disclose fully and truly all material facts necessary for assessment, and whether the reopening was impermissible when the relevant issue had already been queried, replied to, and dealt with in the original assessment.

Analysis: The notice under Section 148 of the Income-tax Act, 1961 was issued beyond four years, so the first proviso to Section 147 applied. In such a case, reassessment can be initiated only if the reasons recorded specifically disclose a failure by the assessee to make a full and true disclosure of material facts. The recorded reasons did not contain any such allegation. Instead, they showed that the reopening was founded on material already furnished with the return and during the assessment proceedings. The assessment record also showed that a query on the relevant deduction issue had been raised, answered by the assessee, and considered in the assessment order. On these facts, reopening on the same material would amount to an impermissible review of the earlier assessment and would also be consistent with a mere change of opinion.

Conclusion: The reassessment notice was invalid and was quashed.

Ratio Decidendi: Where reassessment is sought after four years, the recorded reasons must themselves disclose a failure to fully and truly disclose material facts; if the issue was already examined in assessment on the basis of material supplied by the assessee, reopening on the same basis is barred as an impermissible review or change of opinion.

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