Reopening after four years requires recorded failure to disclose material facts; reassessment invalid without that jurisdictional basis.

Reopening of a scrutiny assessment completed under section 143(3) after four years is valid only if the recorded reasons specifically show that escapement of income resulted from the assessee's failure to disclose fully and truly all material facts necessary for assessment. Here, the reasons for reopening did not contain that jurisdictional allegation, and the material relied on was already available during the original assessment. The first proviso to section 147 was therefore not satisfied, so the reassessment notice and consequential reassessment order were quashed.

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Issues: Whether reassessment initiated beyond four years from the end of the assessment year was valid in the absence of a recorded failure by the assessee to disclose fully and truly all material facts necessary for assessment.

Analysis: The original assessment had been completed under section 143(3) of the Income-tax Act, 1961, and the reopening was issued after the expiry of four years. In such a situation, the first proviso to section 147 requires the Assessing Officer to show that escapement of income was attributable to the assessee's failure to make full and true disclosure of material facts. The recorded reasons did not contain such an allegation, even though the reopening was sought on information that was already available during the original scrutiny assessment. The jurisdictional condition for reopening was therefore not satisfied.

Conclusion: The reassessment notice and the consequential reassessment order were quashed, and the issue was decided in favour of the assessee.

Ratio Decidendi: Where an assessment completed under section 143(3) is reopened after four years, jurisdiction under the first proviso to section 147 can be assumed only if the recorded reasons specifically establish failure by the assessee to disclose fully and truly all material facts necessary for assessment; absent such foundation, the reopening is invalid.

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