Reassessment requires failure to disclose primary facts; reopening failed where technical knowhow details were fully disclosed.

Reassessment under the Income-tax Act is unavailable where the assessee has fully and truly disclosed all primary facts material to the deduction claim at the original scrutiny assessment. Here, the technical knowhow agreement, remittance permission, remittance details and deduction computation were already before the Assessing Officer; any excessive allowance therefore flowed from the Assessing Officer's omission or oversight, not from suppression by the assessee. On that basis, the reopening could not be sustained and the notice under Section 148, together with the reopening order, was set aside in favour of the assessee.

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Issues: Whether reassessment under Sections 147 and 148 of the Income-tax Act, 1961 was valid when the original scrutiny assessment under Section 143(3) had been completed on the same technical knowhow claim and the assessee had disclosed the relevant agreement, correspondence, remittance details, and computation of deduction.

Analysis: Reassessment is permissible only where income has escaped assessment because of the assessee's failure to disclose fully and truly all material facts necessary for assessment. The original assessment was made after scrutiny, and the material relating to acquisition of technical knowhow, permission for remittance, actual remittance, and the basis of the deduction claim had already been placed before the Assessing Officer. On those facts, the alleged excess allowance, if any, was attributable to the Assessing Officer's omission or oversight in the original assessment and not to any suppression by the assessee. Where all primary facts were before the Assessing Officer, Section 147 could not be invoked to rectify the assessment error.

Conclusion: The reopening was invalid. The notice under Section 148 and the order dated May 22, 2001 were set aside in favour of the assessee.

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