Full and true disclosure governs reassessment where primary facts were not placed before the tax authority.

Reassessment under section 34(1)(a) of the Indian Income-tax Act, 1922 is permissible where the assessee fails to disclose fully and truly all primary material facts necessary for assessment. The decisive distinction is between a mere change of inference from disclosed facts and a failure to place the foundational facts before the assessing authority. On the stated facts, the commission claim was reopened because the relevant material had not been fully disclosed and later enquiry suggested the selling agents had rendered no real service.

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Issues: Whether the Income-tax Officer was justified in reopening the assessments under section 34(1)(a) of the Indian Income-tax Act, 1922.

Analysis: Reassessment under section 34(1)(a) is permissible where the assessee has omitted or failed to disclose fully and truly all material facts necessary for assessment. The decisive distinction is between a mere erroneous inference from fully disclosed facts and a failure to disclose the primary facts themselves. On the facts, the assessee had not placed the relevant material before the assessing authorities in its own assessments, and the later enquiry showed that the selling agents had rendered no real service. The earlier acceptance of the commission claim did not bar reopening when the foundational facts were not truly disclosed.

Conclusion: The reopening of the assessments was valid and the reference was answered in the affirmative, against the assessee and in favour of the Revenue.

Final Conclusion: The reassessment jurisdiction was upheld because the assessee had failed to make a full and true disclosure of all material facts.

Ratio Decidendi: Reassessment is justified under section 34(1)(a) when the assessee has failed to disclose fully and truly the primary material facts, and not merely when the Revenue later draws a different inference from the same disclosed material.

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