Reassessment beyond four years fails without a recorded allegation of full and true disclosure failure by the assessee.

Reassessment initiated beyond four years from the end of the relevant assessment year required a recorded allegation that the assessee failed to fully and truly disclose all material facts necessary for assessment; without that jurisdictional averment, the reopening could not stand. The reasons recorded referred only to information from the Investigation Wing and did not state any failure by the assessee to disclose material facts. As the statutory condition under the first proviso to Section 147 was not satisfied, the reassessment was invalid and the order was quashed for want of jurisdiction.

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Issues: Whether reassessment initiated beyond four years from the end of the relevant assessment year was valid when the recorded reasons did not allege any failure by the assessee to fully and truly disclose all material facts necessary for assessment.

Analysis: The reassessment was initiated after the expiry of four years from the end of the assessment year. In such a case, the first proviso to Section 147 of the Income-tax Act, 1961 requires not only tangible material for reopening but also a recorded allegation that the assessee failed to fully and truly disclose all material facts necessary for assessment. The reasons recorded for reopening referred only to information from the Investigation Wing and did not state any such failure on the part of the assessee. The absence of this jurisdictional requirement in the recorded reasons went to the root of the validity of the reopening.

Conclusion: The reopening was invalid and the reassessment order was quashed for want of valid assumption of jurisdiction.

Ratio Decidendi: Where reassessment is initiated beyond four years from the end of the relevant assessment year, the recorded reasons must expressly disclose failure by the assessee to fully and truly disclose all material facts necessary for assessment; in the absence of such a jurisdictional allegation, the reopening is void.

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