Reassessment: Sections 143(3), 147 and 148: A.Y. 2004-05: Original assessment u/s.143(3): Notice u/s.148 beyond 4 years: No allegation in the reasons of failure on the part of the assessee to state fully and truly all material facts necessary for assessment: Reopening not valid.

For the A.Y. 2004-05, the original assessment was made u/s.143(3) of the Income-tax Act, 1961. Subsequently, on 10-2-2011 i.e., beyond the period of 4 years, the Assessing Officer issued notice u/s.148 for reopening the assessment. The reasons recorded for reopening are as under: “You have claimed a melting loss in excess of 7.24%, which is higher than what is found in the similar line of business. So the melting loss earlier allowed is excess.” Objections filed by the assessee were rejected. Thereafter the assessee filed a writ petition challenging the reopening.

The Bombay High Court allowed the writ petition and held as under:

 “(i) The original assessment was completed u/s.143(3). The assessment is sought to be reopened beyond a period of 4 years from the end of the relevant assessment year. The jurisdictional condition is that in such case, before an assessment can be validly reopened, there must be a failure on the part of the assessee to state fully and truly all the material facts necessary for the assessment.

 (ii) There is no such allegation in the reasons which have been disclosed to the assessee. The Assessing Officer has purported to reopen the assessment only recording that according to him the melting loss of 7.24% which was claimed by the assessee is higher than what is found in a similar line of business. This ex facie would amount merely to a change of opinion.

 (iii) The reopening of the assessment u/s.148 is not valid. The consequential assessment order dated 30-12-2011 would have to be quashed and set aside.”