Full and true disclosure limits reassessment where depreciation claim alone does not prove failure to disclose material facts.

Reassessment under the escape-assessment provision requires both escapement of income and a failure to disclose truly and fully the material facts required by the return form or statutory notice at the relevant stage. Mere non-disclosure of every fact that may later prove relevant is insufficient, and a depreciation claim is not inaccurate disclosure solely because it later appears excessive. On the record, no omission in the particulars actually required was shown, so the reopening lacked jurisdiction and the reassessment notices failed; the consequential penalty proceedings also could not survive.

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Issues: Whether the reassessment notices could be sustained on the ground that the assessee had failed to disclose fully and truly all material facts necessary for assessment, thereby causing excessive depreciation to be allowed.

Analysis: The assessee's obligation to disclose is confined to the facts and particulars required to be furnished by the return and the statutory notices at the relevant stage of assessment. Mere failure to volunteer every fact that may later prove relevant does not amount to a failure to disclose material facts unless the Income-tax Officer had required those facts to be furnished or the assessee had withheld primary facts that the prescribed form itself demanded. The written-down value entry in the return was correctly made on the basis of normal depreciation, and the claim of depreciation in the return could not by itself be treated as inaccurate disclosure merely because it later turned out to be excessive. On the record, the department did not establish any omission in the particulars actually required by the return form, nor any failure to disclose facts that the assessee was under a present legal obligation to furnish at that stage.

Conclusion: The condition precedent for reopening the assessments was not satisfied, so the reassessment notices were without jurisdiction. The consequential penalty proceedings also could not survive.

Ratio Decidendi: Reassessment under the escape-assessment provision is valid only when there is both escapement of income and a failure by the assessee to disclose truly and fully the material facts that the statute or the return form required to be disclosed at the relevant stage.

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