The assessee’s income for AY 2015-16 was assessed under section 143(3) of the Income Tax Act, 1961(‘the Act’). The assessment was reopened beyond four years on the ground that the assessee had failed to disclose fully and truly all material facts necessary for assessment as the assessee had failed to substantiate its payments towards interest on loan taken from the banks, and a proportionate interest deduction was incorrectly allowed. Aggrieved from the re-opening, the assessee filed a writ petition before the Hon’ble Bombay High Court, where it was held that since the reassessment was beyond four years, the first proviso to section 147 of the Act applied, whereby the Assessing Officer has to satisfy the jurisdictional condition that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. No such failure was evident, as the reopening was based on information already available in the original assessment. The reassessment was initiated merely on the basis that the predecessor officer had not assessed the income correctly, which is not a valid ground for reopening. Further, the objections raised by the assessee were not rebutted by the Assessing Officer and in absence of rebuttal it shall be presumed that the department have accepted the objections raised by the Petitioner and, therefore, the impugned proceeding is liable to be quashed. Furthermore, the department placed reliance on audit objections that could not justify the reassessment. Accordingly, the Hon’ble High Court quashed the reassessment proceedings as being wholly without jurisdiction, illegal, arbitrary, and liable to be quashed.(AY. 2015-16)