Full disclosure of material facts bars reassessment when reopening rests only on a different legal inference from the same records.

Reassessment under section 147(a) could not be sustained where the assessee had truly and fully disclosed all basic and material facts in the original assessment. The assessee is required to disclose facts, not the legal inferences to be drawn from them, and reopening cannot rest merely on a later different view of the same disclosed material. On the facts, no new basic fact emerged after the original return, and the finding of full disclosure was not shown to be perverse or unsupported by evidence. Reopening was therefore not justified and the issue was decided in favour of the assessee.

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Issues: Whether the reassessment was valid under section 147(a) of the Income-tax Act, 1961, where all basic facts had been disclosed in the original assessment.

Analysis: The obligation of the assessee is to disclose truly and fully all basic and material facts relevant to assessment. It is not the assessee's duty to indicate the legal inferences to be drawn from those facts. On the facts found, no new basic fact had come to light after the original return; the reopening was founded only on a different legal inference from the same disclosed material. In such circumstances, section 147(a) could not be invoked. The finding on disclosure was primarily one of fact and was not shown to be perverse or unsupported by evidence.

Conclusion: Reopening under section 147(a) was not justified and the issue was answered in favour of the assessee.

Ratio Decidendi: Reassessment cannot be sustained under section 147(a) merely because the Assessing Officer later draws a different legal inference from facts truly and fully disclosed in the original proceedings; there must be failure to disclose basic material facts.

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