Reassessment beyond four years fails where scrutiny assessment rested on the same material already examined and fully disclosed.

A reassessment under section 147 initiated after four years from the end of the relevant assessment year is invalid where the original assessment was completed under section 143(3) on scrutiny and no fresh tangible material is shown. Reopening on a reappraisal of the same balance-sheet details and expenditure claims already examined in the original proceedings amounts to impermissible reconsideration. In the absence of any failure by the assessee to fully and truly disclose material facts, the first proviso to section 147 bars the reassessment. The reassessment notice and order were therefore quashed in favour of the assessee.

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Issues: Whether the reassessment initiated under section 147 after expiry of four years from the end of the relevant assessment year was valid when the original assessment had been completed under section 143(3) on the same material and no fresh tangible material was shown.

Analysis: The reassessment notice was issued beyond four years, so the first proviso to section 147 applied. The reasons recorded showed that the Assessing Officer reopened the assessment on a reappraisal of the same balance-sheet details and expenditure claims that had already been examined in the original assessment proceedings. The record also showed that complete details had been furnished earlier and the original assessment had been framed after scrutiny. In these circumstances, there was no failure on the part of the assessee to disclose fully and truly all material facts, and reopening on the same set of facts amounted to impermissible reconsideration of an issue already examined.

Conclusion: The reassessment was invalid and the reassessment order was liable to be quashed, in favour of the assessee.

Ratio Decidendi: Where a completed scrutiny assessment is reopened after four years without fresh tangible material and on the basis of the same material already examined, the reopening is bad in law in the absence of failure to disclose fully and truly all material facts.

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