Reassessment beyond four years requires a recorded failure to disclose material facts fully and truly; reopening was invalid.

A reassessment notice issued after four years from the end of the relevant assessment year is valid only if the recorded reasons show that the assessee failed to fully and truly disclose all material facts necessary for assessment. Here, the assessment had been completed under section 143(3), and the recorded reasons themselves referred to disclosures already made in the return, financial statements, annual report, and earlier scrutiny proceedings. Because the order rejecting objections did not answer the specific challenge on disclosure failure, the jurisdictional condition under the first proviso to section 147 was not met and the reopening was held without jurisdiction.

---

---

Issues: Whether the reassessment notice issued under section 148 of the Income-tax Act, 1961, after expiry of four years from the end of the relevant assessment year could be sustained in the absence of a demonstrated failure by the assessee to disclose fully and truly all material facts necessary for assessment.

Analysis: The assessment had been completed under section 143(3) of the Income-tax Act, 1961, and the reopening was initiated after the expiry of four years from the end of the relevant assessment year, thereby attracting the first proviso to section 147. For reopening in such a case, the recorded reasons had to show a failure on the part of the assessee to make a full and true disclosure of material facts. The recorded reasons themselves referred to disclosures made in the return, profit and loss account, balance-sheet, annual report, and earlier assessment proceedings, including items already considered or not disallowed during scrutiny. The objections specifically raised on the absence of any such failure were not rebutted in the order rejecting objections.

Conclusion: The condition precedent for reopening beyond four years was not satisfied, and the notice under section 148 and the order rejecting objections could not be sustained.

Final Conclusion: The reopening was invalid for want of the jurisdictional requirement under the first proviso to section 147, and the impugned reassessment proceedings were set aside.

Ratio Decidendi: Where an assessment under section 143(3) is reopened after four years from the end of the relevant assessment year, the recorded reasons must disclose a failure by the assessee to fully and truly disclose material facts necessary for assessment; absent such disclosure, the reopening is without jurisdiction.

---