Reassessment beyond four years needs fresh tangible material and nondisclosure; mere reappraisal of existing records is invalid.

Where a reassessment notice is issued more than four years after the end of the relevant assessment year, jurisdiction under section 147 requires fresh tangible material and a specific failure by the assessee to disclose fully and truly all material facts. The recorded reasons in this matter relied only on a reappraisal of material already on record, including disclosure of interest income on HUDCO bonds for deduction under section 36(1)(viii), and identified no undisclosed material fact. The reopening was therefore treated as an impermissible change of opinion, and the reassessment as well as the consequential assessment order were quashed.

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Issues: Whether reassessment proceedings initiated after the expiry of four years from the end of the relevant assessment year were valid in the absence of any new or tangible material and without a specific failure by the assessee to disclose fully and truly all material facts necessary for assessment.

Analysis: The assessment had originally been completed under section 143(3) of the Income-tax Act, 1961, and the notice under section 148 was issued beyond four years. In such a case, the first proviso to section 147 requires a demonstrable failure by the assessee to make a full and true disclosure of material facts. The recorded reasons showed only a reappraisal of the very same material already on record, including the assessee's computation that specifically disclosed interest income on HUDCO bonds for deduction under section 36(1)(viii). No fresh or tangible material was identified, and the reasons did not point to any particular material fact that had not been disclosed truly and fully. On the facts, the reopening amounted to an impermissible review of the concluded assessment rather than a valid reassessment.

Conclusion: The reassessment was held invalid and was quashed, with the consequential assessment order also quashed; the issue was decided in favour of the assessee.

Ratio Decidendi: After four years from the end of the relevant assessment year, reassessment under section 147 is permissible only on the basis of fresh tangible material coupled with a specific failure by the assessee to disclose fully and truly all material facts necessary for assessment; a mere reappraisal of the existing record or change of opinion cannot confer jurisdiction.

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