Reopening beyond four years fails without fresh tangible material and cannot rest on a mere change of opinion.

Reopening of an assessment beyond four years under section 148 of the Income-tax Act is not sustainable where the original assessment under section 143(3) had already examined the very expenses in issue and the recorded reasons rely only on material already on record. In the absence of fresh tangible material, and where no failure to fully and truly disclose material facts was shown, the reopening amounts to a mere change of opinion. On that basis, the notice for reassessment and the consequential proceedings were quashed in favour of the assessee.

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Issues: Whether the notice issued for reopening the assessment under section 148 of the Income-tax Act, 1961 for the assessment year 2012-13, beyond four years from the end of the assessment year, was sustainable in the absence of fresh tangible material and where the issues had already been examined in the original assessment under section 143(3) of the Income-tax Act, 1961.

Analysis: The original assessment was completed under section 143(3) after examination of the books of account, vouchers, registers and supporting material relating to the very expenses referred to in the reasons recorded. The reasons for reopening did not rely on any new or external material and were founded on material already available in the assessment record. In such a situation, reopening beyond four years could not be sustained unless there was failure on the part of the assessee to disclose fully and truly all material facts, which was not shown. The attempted reassessment was therefore based on a mere change of opinion.

Conclusion: The reopening notice under section 148 and the consequential reassessment proceedings were unsustainable and are quashed, in favour of the assessee.

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