Reassessment barred for change of opinion where all primary facts were disclosed and reopening could not be recast later.

Reassessment under sections 147 and 148 cannot be sustained where the assessee has fully and truly disclosed all primary facts, including the ancestral nature of the land, its sale, and the income received; the assessing authority must draw its own inference from disclosed facts, and reopening on a later different inference amounts to a change of opinion. The notices also failed on the alternative ground that they were not shown to be addressed to an association of persons, and the character of the notice could not be recast later to support reopening. The impugned reassessment notices and consequential proceedings were quashed.

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Issues: (i) Whether reassessment notices under sections 147 and 148 could be sustained when the assessee had disclosed all primary facts relating to the sale of ancestral agricultural land and the income received therefrom; (ii) whether the notices were valid on the footing that they were directed against an association of persons rather than the individual petitioners.

Issue (i): Whether reassessment notices under sections 147 and 148 could be sustained when the assessee had disclosed all primary facts relating to the sale of ancestral agricultural land and the income received therefrom.

Analysis: The reassessment power could be exercised only where the Income-tax Officer had reason to believe that income had escaped assessment because of omission or failure on the part of the assessee to make a return or to disclose fully and truly all material facts. The record showed disclosure of the ancestral nature of the lands, the fact of sale, and the amounts received from D.L.F. for the relevant years. The assessee was required to disclose primary facts, not to advise the assessing authority on the inferences to be drawn from those facts. On the facts found, the reopening was founded only on a different inference from the same material, which amounted to a change of opinion.

Conclusion: The reassessment notices were not sustainable on this ground and were invalid against the petitioners.

Issue (ii): Whether the notices were valid on the footing that they were directed against an association of persons rather than the individual petitioners.

Analysis: The notices were addressed to the individuals and not to any association of persons. Even assuming an association of persons existed, the notices did not disclose any such attempt by the Income-tax Officer, and the same material had already been treated as not taxable in the original assessments. The attempted reopening could not be supported by recasting the character of the notice at a later stage.

Conclusion: The notices were not valid on this footing either.

Final Conclusion: The impugned reassessment notices and the consequential proceedings were quashed, leaving the petitioners free from reassessment under the challenged notices.

Ratio Decidendi: Where an assessee has fully and truly disclosed all primary facts necessary for assessment, reassessment cannot be initiated merely because the assessing authority later draws a different inference from those facts or seeks to reopen on a mere change of opinion.

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