Reassessment under full disclosure rules requires a finding on material non-disclosure and resulting escapement of income before final disposal.

Reopening under section 34(1)(a) can be sustained only where escapement of income results from the assessee's failure to disclose fully and truly all material facts necessary for the original assessment. The Tribunal had not recorded any finding on that statutory condition and had disposed of the reference only on the absence of excessive depreciation. The matter was therefore remanded for a finding on whether there was any failure or omission to disclose material facts and whether income had escaped assessment as a consequence.

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Issues: Whether the matter should be remanded to the Tribunal for a finding on failure or omission to disclose fully and truly all material or relevant facts and consequent escapement of income under section 34(1)(a).

Analysis: The reopening under section 34(1)(a) could be sustained only if there had been escapement of income because of the assessee's failure to disclose fully and truly the material facts necessary for the original assessments. The Tribunal had not returned any finding on that essential aspect and had disposed of the reference on the footing that there was no excessive depreciation, without examining whether the statutory conditions for reopening were satisfied.

Conclusion: The matter was remanded to the Tribunal for a finding on whether there was any failure or omission by the assessee to disclose fully or truly material facts and whether any income had escaped assessment in consequence.

Ratio Decidendi: A reference involving reassessment under section 34(1)(a) cannot be finally answered unless the Tribunal first determines whether the assessee failed to disclose fully and truly all material facts and whether such failure caused escapement of income.

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