Reassessment beyond four years requires full and true disclosure; notice quashed where audited accounts and depreciation change were already disclosed.

Reassessment initiated after four years was invalid because the assessee had already made a full and true disclosure of material facts in the original scrutiny assessment. The record showed audited accounts, notes to the financial statements, and the accounting policy explaining the change in depreciation method from SLM to WDV; the Revenue failed to show any suppression or fresh tangible material. The reassessment notice was therefore barred by the proviso to Section 147 of the Income-tax Act and was quashed, along with the order disposing of objections.

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Issues: Whether reassessment initiated after four years from the end of the assessment year was valid when the assessee had disclosed the relevant facts in the original scrutiny proceedings.

Analysis: Reopening beyond four years is permissible only where the assessee has failed to fully and truly disclose all material facts necessary for assessment. The record showed that, in the original scrutiny, the assessee had furnished audited accounts, notes to financial statements, and the accounting policy explaining the change in method of depreciation from Straight Line Method to Written Down-Value Method. The original assessment was completed under scrutiny after considering these materials. The Revenue did not show any non-disclosure of material facts or any fresh tangible material demonstrating suppression by the assessee.

Conclusion: The reassessment notice was barred by the proviso to Section 147 of the Income-tax Act, 1961 and was quashed along with the order disposing of objections; the challenge succeeded in favour of the assessee.

Ratio Decidendi: Reassessment after four years is invalid unless the Revenue establishes failure by the assessee to make a full and true disclosure of material facts necessary for assessment.

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