Reassessment beyond four years requires clear non-disclosure reasons; reopening on already examined material was invalid.

Reassessment initiated beyond four years from the end of the relevant assessment year requires the recorded reasons to specifically allege that escapement of income arose from the assessee's failure to fully and truly disclose all material facts. Where the original assessment was completed under section 143(3) after examination of the disputed claim, and the reopening rested on material already on record with no fresh tangible material, the notice is invalid. A reopening based on audit objection and a mere change of opinion is not legally sustainable; the reassessment notice and resulting order were quashed in favour of the assessee.

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Issues: Whether the reassessment notice issued under sections 147 and 148 after 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 original assessment had been completed under section 143(3) after calling for and receiving details relating to the disputed bad debt claim. The reassessment was founded on material already on record and was triggered on audit objection, without any fresh tangible material. In proceedings initiated beyond four years, the first proviso to section 147 requires a clear basis that escapement of income was due to the assessee's failure to disclose fully and truly all material facts. The recorded reasons did not disclose such failure, and the reopening was treated as impermissible change of opinion rather than a legally sustainable reassessment.

Conclusion: The reassessment notice was bad in law and the reassessment order was quashed; the issue was decided in favour of the assessee.

Ratio Decidendi: For reassessment initiated after four years, the recorded reasons must specifically show the assessee's failure to fully and truly disclose material facts, and reopening cannot rest on material already examined in the original assessment or on a mere change of opinion.

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