Reopening for non-disclosure and audit objection failed where disclosed facts were sufficient and audit opinion on law was not information.

Non-disclosure of a collateral reconveyance agreement did not justify reopening under section 147(a) because the purchase, lease-back arrangement and lease rent had already been disclosed, and the agreement was not a primary fact material to the original assessment. Reassessment for the first two years was therefore invalid. Reopening under section 147(b) also failed because it rested on an audit party's legal view that lease rent was really interest and the transaction was a mortgage by conditional sale; an audit opinion on a point of law is not "information" for that purpose. The reassessment for the later year was therefore invalid, and the revenue's challenge failed in full.

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Issues: (i) Whether reassessment under section 147(a) for the assessment years 1971-72 and 1972-73 was valid on the ground that the agreement to reconvey the property was not disclosed to the Assessing Officer; (ii) Whether reassessment under section 147(b) for the assessment year 1974-75 was valid when the reopening was founded on an audit objection expressing a legal view about the nature of the transaction.

Issue (i): Whether reassessment under section 147(a) for the assessment years 1971-72 and 1972-73 was valid on the ground that the agreement to reconvey the property was not disclosed to the Assessing Officer.

Analysis: The purchase of agricultural land, the lease-back arrangement and the lease rent were disclosed to the Assessing Officer, and the original assessments were completed on that basis. The reconveyance agreement was held not to be a primary fact having a material bearing on the assessment. The document was also examined in the light of section 58(c) of the Transfer of Property Act, 1882, and was treated as contingent upon future events rather than as a fact that had to be disclosed for the original assessment.

Conclusion: The reassessments under section 147(a) for the assessment years 1971-72 and 1972-73 were invalid.

Issue (ii): Whether reassessment under section 147(b) for the assessment year 1974-75 was valid when the reopening was founded on an audit objection expressing a legal view about the nature of the transaction.

Analysis: The reopening for 1974-75 was based on the audit party's view that the lease rent was really interest and that the transaction amounted to a mortgage by conditional sale. An audit party's opinion on a question of law was held not to constitute information for the purpose of section 147(b). Since the reassessment was triggered by that legal objection, it lacked jurisdictional foundation.

Conclusion: The reassessment under section 147(b) for the assessment year 1974-75 was invalid.

Final Conclusion: The reassessment proceedings for all the years in question were struck down, and the revenue's challenge failed in entirety.

Ratio Decidendi: Non-disclosure of a collateral agreement that is not a primary fact material to the original assessment does not justify reopening under section 147(a), and an audit party's opinion on a point of law cannot constitute information under section 147(b).

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