Reopening after four years needs failure to disclose material facts; reassessment on examined issues is invalid change of opinion.

Reopening after four years from a completed assessment under Section 143(3) requires recorded reasons to specifically allege failure by the assessee to fully and truly disclose all material facts; absent that foundation, the notice is invalid. Reassessment also cannot proceed on issues already examined in the original assessment, because reopening on the same material amounts to a prohibited change of opinion rather than a fresh jurisdictional basis. The notice was therefore quashed and the writ petition succeeded.

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Issues: (i) Whether reopening beyond four years from the end of the relevant assessment year was valid in the absence of any allegation that the assessee failed to disclose fully and truly all material facts necessary for assessment; (ii) Whether the reassessment could be sustained when the very issues on which reopening was sought had already been examined during the original assessment proceedings.

Issue (i): Whether reopening beyond four years from the end of the relevant assessment year was valid in the absence of any allegation that the assessee failed to disclose fully and truly all material facts necessary for assessment.

Analysis: The first proviso to Section 147 of the Income-tax Act, 1961 requires, in a case where an assessment under Section 143(3) has already been completed and reopening is sought after four years, a specific allegation and foundation that the assessee failed to disclose fully and truly all material facts necessary for assessment. The recorded reasons did not contain such an allegation and, on their own face, showed that the reopening was based on verification of the profit and loss account and other records.

Conclusion: The reopening notice was invalid on this ground and could not be sustained.

Issue (ii): Whether the reassessment could be sustained when the very issues on which reopening was sought had already been examined during the original assessment proceedings.

Analysis: The issue relating to deduction under Section 80P had been examined in the original assessment order, and the question of disallowance under Section 40(a)(ia) arose during assessment through a query notice and a reply furnished by the assessee. Reopening on these very matters amounted to a change of opinion and a review of the earlier assessment, which is impermissible under Section 147.

Conclusion: The reassessment could not be sustained because it was based on a mere change of opinion.

Final Conclusion: The impugned reopening notice was quashed, and the writ petition succeeded.

Ratio Decidendi: Where reopening is sought after four years from a completed assessment under Section 143(3), the recorded reasons must disclose failure to fully and truly disclose material facts, and reassessment cannot be founded on issues already examined in the original assessment as that would amount to a prohibited change of opinion.

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