Reassessment beyond four years requires specific failure to disclose and valid jurisdiction; reopening here was held invalid.

Reopening an assessment beyond four years under section 147 requires the recorded reasons to specifically identify the assessee's failure to disclose fully and truly all material facts; reopening based only on Investigation Wing information, without independent verification by the Assessing Officer, is invalid. A notice under section 148 is also jurisdictionally defective where it is issued by an officer lacking territorial jurisdiction and no transfer order under section 127 is shown. On these grounds, the reassessment proceedings were quashed and the assessee succeeded.

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Issues: (i) Whether reassessment under section 147 of the Income-tax Act, 1961 was valid when it was initiated beyond four years without recording the assessee's failure to disclose fully and truly all material facts and without independent verification; (ii) Whether the notice under section 148 and the consequential reassessment were invalid for want of jurisdiction, as the reopening was made by an officer other than the one having jurisdiction and no order under section 127 was shown.

Issue (i): Whether reassessment under section 147 of the Income-tax Act, 1961 was valid when it was initiated beyond four years without recording the assessee's failure to disclose fully and truly all material facts and without independent verification.

Analysis: The reasons recorded did not spell out the specific failure of disclosure required to reopen an assessment after the expiry of four years from the end of the relevant assessment year. The reopening was founded on information received from the Investigation Wing and not on any independent enquiry or verification by the Assessing Officer. In such circumstances, the foundational requirement for exercising jurisdiction under the extended period of reassessment was not satisfied.

Conclusion: The reopening on this ground was invalid and went in favour of the assessee.

Issue (ii): Whether the notice under section 148 and the consequential reassessment were invalid for want of jurisdiction, as the reopening was made by an officer other than the one having jurisdiction and no order under section 127 was shown.

Analysis: The record showed that the reassessment was initiated by an officer who did not have jurisdiction over the assessee, while the case was later transferred to the correct jurisdiction. No order under section 127 transferring jurisdiction was placed on record. Jurisdiction to reopen is a condition precedent, and a notice issued by an lacking jurisdiction cannot sustain the reassessment proceedings.

Conclusion: The notice and the reassessment were jurisdictionally defective and went in favour of the assessee.

Final Conclusion: The reassessment proceedings were quashed, the Revenue's appeal failed, and the assessee's cross objections succeeded.

Ratio Decidendi: For reopening an assessment beyond four years, the reasons must specifically record the assessee's failure to disclose fully and truly all material facts, and reassessment initiated by an officer lacking jurisdiction without a valid transfer order is void.

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