Reopening beyond four years fails where no fresh material exists and assessment rests only on a change of opinion.

Reopening of assessment beyond four years under the Income-tax Act, 1961 requires the Revenue to show both a failure by the assessee to disclose fully and truly all material facts and the existence of new tangible material, especially where the original assessment was completed under Section 143(3). The recorded reasons here rested on material already available in the assessment record and annual accounts, with no fresh material emerging after the original scrutiny. On that basis, the reassessment amounted only to a reappraisal of the same facts and was treated as a change of opinion. The reopening was therefore invalid and the reassessment could not be sustained for want of jurisdiction.

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

Analysis: The original assessment had been completed under Section 143(3) of the Income-tax Act, 1961, after scrutiny of the material placed by the assessee. The notice under Section 148 of the Income-tax Act, 1961 was issued beyond four years, so the proviso to Section 147 of the Income-tax Act, 1961 applied. In that situation, reopening could be sustained only if the Revenue showed both a failure to make a full and true disclosure and the existence of new material giving rise to a belief that income had escaped assessment. The reasons recorded for reopening relied on facts already reflected in the annual accounts and assessment record, and no fresh material was shown to have emerged after the original assessment. The reassessment was therefore founded only on a reappraisal of the same material, which amounts to a change of opinion.

Conclusion: The reopening was invalid and the reassessment could not be sustained; the challenge by the Revenue failed on jurisdiction.

Final Conclusion: No interference was warranted with the concurrent findings that the reassessment was without jurisdiction, and the appeal was dismissed.

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