Reopening of assessment requires relevant material and nondisclosure of primary facts; sufficiency of evidence cannot be tested at initiation.

Reopening under section 147(a) requires the assessing officer to have some relevant material forming a bona fide reason to believe that income escaped assessment because the assessee failed to disclose fully and truly all primary facts necessary for assessment. The court may examine in writ proceedings whether such material exists, but not its adequacy or sufficiency. The assessee's duty is limited to disclosure of primary facts, not the drawing of inferences by the officer. At the initiation stage, the assessee is not entitled to demand disclosure of the reasons supporting the belief. On the stated records, the notices were treated as valid.

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Issues: Whether notices for reopening assessment under section 147(a) read with section 148 of the Income-tax Act, 1961 were valid when the assessee challenged the existence of material and the alleged failure to disclose fully and truly all material facts.

Analysis: Reopening under section 147(a) requires the Income-tax Officer to have reason to believe that income has escaped assessment by reason of the assessee's omission or failure to disclose fully and truly all material facts necessary for assessment. The existence of the belief and the existence of some relevant material can be examined in writ proceedings, but the adequacy or sufficiency of the material cannot be gone into. The assessee's duty extends to disclosure of all primary facts, not to the drawing of inferences by the assessing officer. The Court found, on the records including the seized-material report and the balance-sheet note, that there was material on which the officer could form the requisite belief and that the alleged non-disclosure could fall within the statutory mischief. It also held that the reasons forming the basis of the belief need not be disclosed at the threshold to the assessee.

Conclusion: The reopening notices were valid and the challenge to the initiation of reassessment failed.

Ratio Decidendi: For reopening under section 147(a), the officer must have some relevant material giving rise to a bona fide reason to believe that escapement of income occurred because of non-disclosure of primary facts, while the court may test the existence of such material but not its sufficiency, and the assessee is not entitled at the initiation stage to demand disclosure of the reasons.

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