Reassessment notice invalid where jurisdictional conditions under section 34 were not both established.

Reassessment notices issued beyond four years but within eight years under section 34 of the Indian Income-tax Act, 1922 required two jurisdictional conditions to coexist: the Income-tax Officer must have reason to believe that income escaped assessment or was under-assessed, and that the escapement was attributable to the assessee's omission or failure to make a return or to disclose fully and truly all material facts necessary for assessment. The affidavits supporting the notice did not contain the necessary averment and did not establish the second condition precedent, so the notice lacked jurisdictional validity and could not be sustained.

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Issues: Whether the reassessment notice issued under section 34 of the Indian Income-tax Act, 1922 was valid when the Income-tax Officer had not shown reason to believe that escapement or under-assessment occurred by reason of the assessee's omission or failure to disclose fully and truly all material facts necessary for assessment.

Analysis: For notice beyond four years but within eight years from the end of the assessment year, section 34 required two conditions to co-exist: reason to believe that income had escaped assessment or been under-assessed, and reason to believe that such escapement or under-assessment was attributable to omission or failure by the assessee to make a return or to disclose fully and truly all material facts necessary for assessment. The affidavits filed in support of the notice did not contain the necessary averment, and on examination they did not establish the second condition precedent. Without satisfaction of both jurisdictional requirements, the notice could not be sustained.

Conclusion: The reassessment notice was invalid and the appeal failed.

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