Reassessment jurisdiction requires both escaped income and assessee nondisclosure of material facts before reopening can stand.

Reassessment jurisdiction under the income-tax law arises only if two cumulative conditions are met: the Assessing Officer must have reason to believe income escaped assessment, and that escapement must result from the assessee's omission or failure to disclose fully and truly all material facts. The material jurisdictional question is whether the alleged escapement was attributable to such nondisclosure; without that finding, reassessment notices cannot be upheld. The matter was therefore remitted for fresh determination of the statutory precondition governing reopening.

---

---

Issues: Whether reassessment notices issued under the income-tax law could be sustained without a finding that the assessee had omitted or failed to disclose fully and truly all material facts necessary for assessment.

Analysis: The jurisdiction to reopen an assessment depended on cumulative conditions: the Income-tax Officer must have reason to believe that income had escaped assessment and that such escapement occurred by reason of the assessee's omission or failure to disclose fully and truly all material facts. The High Court proceeded on the footing that income had escaped assessment but did not determine the essential jurisdictional question whether the escapement was attributable to any such omission or failure on the part of the assessee. That issue was necessary to decide the validity of the reassessment notices.

Conclusion: The reassessment issue was not finally decided on merits and had to be examined afresh on the jurisdictional question.

Final Conclusion: The judgment under appeal was set aside and the matter was remitted for determination of the statutory precondition governing reassessment.

Ratio Decidendi: Reassessment jurisdiction under the relevant income-tax provision can be exercised only when both statutory conditions exist, including a causal nexus between escapement of income and the assessee's omission or failure to make a full and true disclosure of material facts.

---