Reassessment after four years requires disclosure failure, while loans to non-registered shareholders cannot trigger deemed-dividend taxation.

Reassessment after four years of a completed scrutiny assessment requires the assessee's failure to make a full and true disclosure of material facts; disclosure of shareholding, transactions and lender-company details prevents reopening on the same material. The notes also state that the alternative-remedy rule may yield where an assessment disregards binding precedent or acts contrary to settled law. Deemed-dividend treatment does not extend to a loan received by a non-registered shareholder merely through statutory fiction, particularly where the relevant common shareholding is below the prescribed threshold.

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Issues: (i) Whether the writ petition was maintainable despite the statutory appellate remedy; (ii) Whether reassessment beyond four years and the consequential deemed-dividend addition were valid where all material facts had been disclosed and the assessee was not a registered shareholder of the lender company.

Issue (i): Whether the writ petition was maintainable despite the statutory appellate remedy.

Analysis: The alternative-remedy rule admits exceptions where the statutory authority acts contrary to the enactment or settled legal position. The assessment had disregarded binding legal precedent specifically raised in the objections. The prolonged subsistence of interim protection also supported exercise of writ jurisdiction.

Conclusion: The writ petition was maintainable notwithstanding the alternative appellate remedy, in favour of the assessee.

Issue (ii): Whether reassessment beyond four years and the consequential deemed-dividend addition were valid where all material facts had been disclosed and the assessee was not a registered shareholder of the lender company.

Analysis: A completed scrutiny assessment cannot be reopened after four years absent failure to make full and true disclosure of material facts. The shareholding pattern, transactions and lender-company details had been supplied during the original assessment, and no suppression was established. Further, the deemed-dividend provision did not apply because the assessee was not a registered shareholder of the payer company and the common shareholder held only 4.60% in the assessee, below the prescribed threshold.

Conclusion: The reopening and the deemed-dividend addition were invalid, in favour of the assessee.

Final Conclusion: The reassessment proceedings and all consequential fiscal demands lack legal foundation.

Ratio Decidendi: Reopening after four years of a completed scrutiny assessment requires failure by the assessee to fully and truly disclose material facts; a loan to a non-registered shareholder cannot be taxed as deemed dividend merely through the statutory fiction.

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