Reassessment based on disclosed hundi loan details fails where the officer omitted further enquiry into genuineness.

Reassessment under section 147(a) cannot be based on a supposed failure to disclose material facts where the assessee has already furnished the primary details in the original proceedings. Here, the hundi loan particulars were disclosed, and the assessing officer had the material before him, including sufficient basis to pursue further enquiry into genuineness. The defect lay in the officer's failure to investigate, not in any suppression by the assessee. On that principle, reopening was invalid and the reassessment was cancelled in favour of the assessee.

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Issues: Whether reassessment under section 147(a) was validly initiated on the ground that the assessee had failed to disclose fully and truly all material facts relating to the hundi loans.

Analysis: The assessee had furnished the details of the hundi loans in the original assessment proceedings, and the assessing officer had the material before him and even noted the need for further investigation into genuineness. The reassessment was therefore founded on facts already disclosed, and the omission, if any, lay in the officer's failure to make the necessary enquiry rather than in any suppression of primary facts by the assessee. On the governing principle applied, reassessment cannot be sustained where the assessee has placed the basic material before the officer and has not withheld any primary fact necessary for assessment.

Conclusion: Reopening under section 147(a) was invalid, and the reassessment was rightly cancelled in favour of the assessee.

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