Reassessment jurisdiction fails where no omission to disclose material facts is shown and the reopening rests on a income assumption.

Reassessment under section 147 required material showing that escapement of income resulted from the assessee's omission or failure to disclose fully and truly all material facts. That jurisdictional condition was not met because the enhanced compensation was fixed after the first two assessments, so no nondisclosure could be attributed to the assessee, and the assessee's production of the compensation agreement for the third year was not rebutted. The proposed reopening also rested on an incorrect assumption that the higher compensation itself was taxable house-property income, whereas the relevant inquiry was annual value under sections 22 and 23. The reassessment notices were therefore invalid, and any consequential assessments were set aside.

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Issues: Whether the notices issued under section 148 for reopening the assessments for the relevant years were valid, in the absence of any omission or failure by the assessee to disclose fully and truly all material facts necessary for the original assessments.

Analysis: Reopening under clause (a) of section 147 could be sustained only if the Income-tax Officer had material to believe that escapement of income was attributable to the assessee's omission or failure to make full and true disclosure. For the first two years, the assessments had already been completed before the enhanced compensation was fixed, and the assessee could not be blamed for non-disclosure of a later event. For the third year, the assessee's assertion that the compensation agreement had been produced was not controverted. The court also found that the proposed escapement was founded on an improper assumption that the higher compensation itself represented taxable house-property income, whereas the matter turned on annual value under sections 22 and 23, not on the assessee's accounting method or later enhancement of compensation. On these facts, the jurisdictional precondition for reassessment was not satisfied.

Conclusion: The reassessment notices were invalid and liable to be quashed, and the consequential assessments, if made, were also set aside.

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