“material facts necessary for assessment”
The decision most relied on for material facts necessary for assessment is Calcutta Discount Co. Ltd. v. ITO (41 ITR 191), cited in 384 judgments on BharatTax.
Leading authorities on material facts necessary for assessment
The assessee's duty is limited to disclosing all primary, material facts necessary for assessment, including entries, documents, and other evidence. It is for the Assessing Officer to draw inferences of fact and law, and the assessee is not obligated to offer such inferences.
Reassessment proceedings initiated under Section 147 beyond four years from the end of the relevant assessment year are invalid unless the assessee failed to disclose fully and truly all material facts necessary for assessment. Without such failure, the notice issued under Section 148 is time-barred and without jurisdiction.
A live link of third-party information can form the basis for reopening an assessment under Section 148, provided it contains material facts necessary for assessment. The Assessing Officer must demonstrate a "reason to believe" that income has escaped assessment, which can be satisfied by such information even if it pertains to other assessees or relates to accommodation entries.
An assessment cannot be reopened beyond four years from the end of the relevant assessment year unless the assessee failed to make a full and true disclosure of all material facts necessary for assessment.
Reopening of an assessment beyond four years from the end of the relevant assessment year is invalid if it is based on a mere change of opinion or borrowed satisfaction, or if the reasons recorded do not explicitly allege the assessee's failure to truly and fully disclose all material facts necessary for assessment.
Reopening assessments is permissible after four years if there was an escapement of income due to the assessee's failure to disclose material facts necessary for assessment, even if the initial assessment involved a change of opinion.
Reassessment proceedings are valid when there is a failure to disclose fully and truly all material facts necessary for assessment.
Reopening assessment beyond four years under Section 147 is permissible only if the assessee failed to disclose fully and truly the material facts necessary for assessment. Mere change of opinion is not a valid ground for reopening.
