Full and true disclosure in reassessment fails where the tax officer already knew the primary facts during assessment.

Section 34(1)(a) of the Indian Income-tax Act, 1922 did not permit reassessment where the Income-tax Officer had already obtained the primary facts about the cash credits before the assessment was completed. Once the dates, nature and source of the credits were before the assessing authority, it was for him to draw the proper legal and factual inferences; the assessee was not bound to repeat facts already known to the department. The burden remained on the department to show that any escapement of income resulted from the assessee's failure to disclose fully and truly all material facts. Reassessment was therefore barred by limitation.

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Issues: Whether reassessment under section 34(1)(a) of the Indian Income-tax Act, 1922 was valid when the Income-tax Officer had already acquired the primary facts relating to the cash credits before the relevant assessment was completed.

Analysis: Section 34(1)(a) applies only where income has escaped assessment because of the assessee's omission or failure to make a return or to disclose fully and truly all material facts necessary for the assessment. Here, the dates of the cash credits and their nature and source had come to the notice of the Income-tax Officer while the assessment for the relevant year was still pending. Once those primary facts were before the assessing authority, it was for him to draw the proper factual and legal inferences. The assessee was not required to repeat in the return a fact already known to the Income-tax Officer, and the burden remained on the department to show that the escapement was attributable to the assessee's default.

Conclusion: Section 34(1)(a) was not attracted, and the reassessment was barred by limitation.

Ratio Decidendi: Reassessment under section 34(1)(a) cannot be sustained where the assessing officer had already acquired the primary facts necessary for assessment while the relevant proceedings were pending, because escapement in such a case is not attributable to any failure by the assessee to make a full and true disclosure.

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