Reassessment requires non-disclosure of primary facts, and reopening fails without material showing escapement from that failure.

Reassessment under section 147(a) is valid only where the assessing officer has material to form a bona fide belief that income escaped assessment because the assessee failed to make a full and true disclosure of all primary facts. Where the assessee has produced the relevant hundis and books of account showing the loans and interest payments, the duty of disclosure is satisfied by disclosure of primary and material facts; there is no obligation to tell the officer that the documents are bogus or to draw adverse inferences for him. On the material before the Court, no sufficient basis existed for the required belief, so the notice under section 148 was void and the appeal was dismissed.

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Issues: Whether the notice reopening the assessment under section 147(a) of the Income-tax Act, 1961 was valid, having regard to the assessee's disclosure of primary facts and the requirement that the Income-tax Officer have reason to believe that income had escaped assessment by reason of such failure.

Analysis: The assessee had produced the hundis and the relevant books of account showing the loans and the interest payments. The obligation of disclosure was confined to the full and true disclosure of primary and material facts necessary for assessment. There was no duty on the assessee to inform the assessing authority that the documents produced were bogus or to draw adverse inferences for the officer. The reopening provision could be invoked only where the officer had material to form the belief that income had escaped assessment because of the assessee's failure to disclose fully and truly all material facts. On the affidavit before the Court, no sufficient material was shown to support such belief.

Conclusion: The condition for invoking section 147(a) was not satisfied and the notice under section 148 was void. The appeal was rightly dismissed.

Ratio Decidendi: Disclosure of all primary facts satisfies the assessee's duty under the reassessment provision, and reopening is impermissible unless the assessing officer can show material for a bona fide belief that escapement of income resulted from the assessee's failure to make a full and true disclosure.

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