Reassessment Beyond Four Years Fails Without Full Disclosure; reopening quashed where material facts were already disclosed.

Reopening of assessment beyond four years from the end of the relevant assessment year is barred unless the assessee failed to disclose fully and truly all material facts. Here, the original return and the relevant transaction details were already before the AO in the earlier proceedings, and no such failure by the assessee was shown. The recorded reasons had to stand on their own and could not be supported by extraneous material. Since the statutory condition for reopening under the first proviso to section 147 was not met, the reassessment proceedings were held invalid and quashed in favour of the assessee.

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Issues: Whether the reassessment initiated beyond four years from the end of the relevant assessment year was valid in the absence of any failure by the assessee to disclose fully and truly all material facts.

Analysis: The reopening was made after expiry of four years from the end of the relevant assessment year, attracting the first proviso to section 147 of the Income-tax Act, 1961. The record showed that the original return and the material facts relating to the transaction were already part of the earlier assessment proceedings, and there was no failure by the assessee to make full and true disclosure. The reasons recorded for reopening had to be tested on their own terms and could not be supplemented by extraneous material. On that basis, the statutory condition for reopening beyond four years was not satisfied.

Conclusion: The reassessment proceedings were invalid and were quashed in favour of the assessee.

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