Reopening of assessment cannot cure a piecemeal assessment where the tax officer already knew the relevant income facts.

Section 34 of the Income-tax Act, 1922 could not be used to reopen an assessment where the relevant facts were already within the Income-tax Officer's knowledge and the attempt was only to complete a piecemeal assessment. The officer knew the assessee's share in the partnership and that the related profits had to be included in total income, so there was no later discovery of previously unknown income. Section 23 required a complete assessment of total income, and reopening was not justified merely because the exact amount had not been worked out initially. The notice was therefore invalid.

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Issues: Whether notice under Section 34 of the Income-tax Act, 1922 could validly be issued when the material facts were already within the knowledge of the Income-tax Officer and the assessment had been made piecemeal.

Analysis: The facts on which the notice was founded were already known to the Income-tax Officer, apart from the exact amount of profits. The record showed that the officer knew the assessee's share in the partnership business and that the profits of that concern were required to be brought into the total income. Section 23 of the Income-tax Act, 1922 requires a complete assessment of total income, and it was held that the officer could not assess part of the income first and then resort to Section 34 for reopening merely to include the remaining income later. Since this was not a case of later discovery of previously unknown income, the foundation for reopening was absent.

Conclusion: The notice under Section 34 was invalid and the question was answered in the negative, in favour of the assessee.

Final Conclusion: Reassessment could not be sustained where the Income-tax Officer had attempted to complete the assessment in stages despite knowing the relevant income material.

Ratio Decidendi: Section 34 cannot be invoked to reopen an assessment when the relevant facts were already known to the Income-tax Officer and the attempt is only to complete a piecemeal assessment of income.

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