Reassessment based on change of opinion fails where primary facts were fully disclosed and no nondisclosure is shown.

Reassessment under section 34(1)(a) was treated as invalid where the assessee had already disclosed the primary facts, including the relevant agreements and accounts, before the original assessing officer. The materials on record were sufficient for the officer to assess the receipts, and a later attempt to reopen on the same facts amounted to a mere change of opinion rather than a failure of full and true disclosure. Although reassessment is not confined to the exact items mentioned in the notice, additions could not stand once reopening itself lacked jurisdiction.

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Issues: (i) Whether the reassessment under section 34(1)(a) of the Income-tax Act was valid for want of full and true disclosure of material facts; (ii) Whether the additions made in the reassessment in respect of the agreements other than the two specifically mentioned in the notice were legal.

Issue (i): Whether the reassessment under section 34(1)(a) of the Income-tax Act was valid for want of full and true disclosure of material facts.

Analysis: The agreements and accounts had in fact been called for and produced before the original assessing officer. The materials before him were sufficient to show the nature of the receipts and to enable him to decide whether the whole amount or only a part of it was taxable in the relevant year. Where all primary facts were before the officer and the reopening was based only on a different inference from the same materials, the later attempt amounted to a mere change of opinion and not to a failure to disclose fully and truly all material facts.

Conclusion: The reassessment under section 34(1)(a) was not valid.

Issue (ii): Whether the additions made in the reassessment in respect of the agreements other than the two specifically mentioned in the notice were legal.

Analysis: Once reassessment was opened, the revenue could examine the entire assessment and was not confined to the exact instances recited in the notice. However, that procedural width did not cure the absence of jurisdiction to reopen under section 34(1)(a) where there had been no nondisclosure by the assessee. The substantive additions therefore could not be sustained in reassessment proceedings.

Conclusion: The additions were not sustainable.

Final Conclusion: The reopening and the resulting reassessment failed, because the assessee had disclosed the relevant primary facts and the assessment could not be revised merely on a changed view of their tax effect; the question referred was answered in favour of the assessee.

Ratio Decidendi: Reassessment under section 34(1)(a) cannot be sustained when the assessee has disclosed all primary material facts and the reopening rests only on a subsequent change of opinion as to the legal inference to be drawn from those facts.

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