Reassessment based on disclosed primary facts failed where reopening followed only a valuation reference and no nondisclosure was shown.

Reassessment under section 147(a) could not be sustained where the assessee had already disclosed the primary facts in the original return, including construction of the shop-cum-godown, and the reopening was triggered only by a Departmental Valuation Officer reference. On those admitted facts, the Tribunal treated the reference as a fishing enquiry and held that the statutory requirement of failure to disclose fully and truly all material facts was not met. It also held that the jurisdictional objection could be raised in appeal on the admitted record. The reassessment was therefore invalid and the addition made in reassessment could not survive.

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Issues: Whether reassessment under section 147(a) of the Income-tax Act, 1961 could be sustained when the assessee had disclosed the primary facts in the original return and the reassessment was initiated only after a valuation reference.

Analysis: The original assessment had been completed under section 143(1) on the basis of the return and accompanying material. The fact of construction of the shop-cum-godown was already disclosed by the assessee, and the subsequent reference to the Departmental Valuation Officer was treated as a fishing enquiry. On those admitted facts, the basis for reopening was held to be absent, because reassessment under section 147(a) requires failure by the assessee to disclose fully and truly all material facts necessary for assessment. The Tribunal also held that the jurisdictional objection could be raised in appeal on the admitted facts.

Conclusion: Reassessment was invalid and the addition made therein could not survive. The issue was decided in favour of the assessee.

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