Reassessment beyond four years needs independent material and proof of failure to disclose; borrowed information is insufficient.

Reassessment under section 147 requires tangible material and a rational nexus with escapement of income; it cannot rest on borrowed investigation information or a mechanical, unverified acceptance of third-party material. Where the original assessment was completed under section 143(3) and reopening was initiated after four years, the Revenue had to also show a specific failure by the assessee to fully and truly disclose all material facts. The recorded reasons did not independently verify the information, did not establish the nature of the transaction, and amounted to a fishing and roving enquiry. As the transaction had already been disclosed in the original proceedings, the jurisdictional conditions for reopening were not met and the reassessment was quashed.

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Issues: Whether the reassessment notice and consequential reassessment were valid when the Assessing Officer relied only on investigation information without independent enquiry and, after expiry of four years from the end of the assessment year, failed to record a live nexus showing failure by the assessee to disclose fully and truly all material facts.

Analysis: Reassessment under section 147 requires reason to believe based on tangible material having a rational nexus with escapement of income, and not on suspicion or a mechanical acceptance of third-party information. Where the original assessment was completed under section 143(3) and the notice was issued beyond four years, the first proviso to section 147 applies, placing a further burden on the Revenue to show a specific failure by the assessee to make a full and true disclosure of all material facts. The recorded reasons merely relied on the investigation report, did not independently verify the material, did not establish the nature of the receipt in question, and effectively sought to conduct a fishing and roving enquiry. The relevant transaction had already been disclosed in the original assessment proceedings, and no adverse inference had been drawn at that stage. In such circumstances, the statutory jurisdictional conditions for reopening were not satisfied.

Conclusion: The reassessment was invalid and was quashed.

Ratio Decidendi: Reassessment cannot be sustained on borrowed information or for fishing enquiries; where reopening beyond four years follows an assessment under section 143(3), the Assessing Officer must record cogent material showing both escapement of income and the assessee's failure to fully and truly disclose material facts.

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