Reassessment on fully disclosed primary facts was invalid, as reopening cannot rest on a mere change of inference.

Reassessment under Section 147 was invalid because the assessee had disclosed all primary facts with the return and there was no failure to disclose fully and truly material facts. The original assessment had been completed under Section 143(1), and reopening was based on information about a higher sale value disclosed by the purchaser of the lorry. Once the primary facts were on record, the Assessing Officer was required to make the necessary enquiries, and a mere failure to draw the correct inference could not justify reopening. The reopening was therefore not in order.

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Issues: Whether the reassessment under Section 147 of the Income-tax Act, 1961 was valid when the assessee had disclosed the primary facts at the time of the original assessment.

Analysis: The original assessment had been completed under Section 143(1) of the Income-tax Act, 1961 on the returned income. Reopening was based on information regarding a higher sale value disclosed by the purchaser of the lorry. The Tribunal found that all primary facts necessary for assessment had been furnished with the return and that there was no omission or failure by the assessee to disclose fully and truly all material facts. Applying the principle that once primary facts are disclosed it is for the Assessing Officer to make the necessary enquiries, and that mere failure to draw the correct inference does not justify reopening, the Tribunal's conclusion was held to be correct.

Conclusion: The reassessment was invalid and the reopening of assessment was not in order.

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