Reassessment cannot reopen an issue already examined in scrutiny assessment absent failure of full and true disclosure.

A reassessment under the Income-tax Act, 1961 was held impermissible where the original scrutiny assessment under Section 143(3) had already examined the relevant payment and TDS issue, and the Revenue could not show any failure by the assessee to disclose fully and truly all material facts. Mere reconsideration of an issue already dealt with in the concluded assessment could not satisfy the conditions for reopening under Section 147. The court also noted that the payments were not claimed as expenditure in a manner attracting disallowance under Section 40(a)(ia). The reassessment notice and consequent proceedings were therefore invalid.

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Issues: Whether reassessment under Section 148 of the Income-tax Act, 1961 was valid when the original assessment under Section 143(3) had already examined the relevant issue and there was no failure by the assessee to disclose fully and truly all material facts.

Analysis: The original assessment for the relevant year had been completed under Section 143(3) after scrutiny, and the issue concerning tax treatment of payments and related TDS consequences had been examined. Reopening was founded on information noticed in a later year, but the materials on record showed that the earlier assessment already dealt with the transaction and the alleged escapement was not shown to have arisen from any failure of disclosure by the assessee. In a concluded assessment, the burden lies on the Assessing Officer to establish that the conditions for reopening under Section 147 are satisfied, and mere reconsideration of an already examined issue cannot justify reassessment. The payments in question were also found not to have been claimed as expenditure in the manner necessary to attract disallowance under Section 40(a)(ia).

Conclusion: The reassessment notice and consequent proceedings were invalid, and the challenge to reopening failed against the Revenue.

Ratio Decidendi: An assessment completed under Section 143(3) of the Income-tax Act, 1961 can be reopened under Section 147 only if escapement of income is attributable to the assessee's failure to make a full and true disclosure of material facts; where the issue was already examined in the original assessment, reopening is impermissible.

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