Reopening for nondisclosure fails where primary facts are already disclosed and only the legal inference was missed.

Reopening under section 147(a) requires failure to disclose fully and truly all material facts; where the assessee has already placed the primary facts before the Income-tax Officer, including the development rebate claim and the accounting entries showing the relevant debit and credit, there is no nondisclosure of primary fact. A later attempt to treat the same facts as insufficient is only a failure to draw the legal consequence from disclosed material, not an omission by the assessee. On that basis, the balance-sheet would not have added anything material, and reopening on the footing of suppressed facts is not justified.

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Issues: Whether the Income-tax Officer could reopen the assessment under section 147(a) on the ground that the assessee had not disclosed material facts relating to entitlement to development rebate.

Analysis: The assessee had disclosed the primary facts in the original assessment proceedings, including the particulars of the development rebate claimed and the accounting entries showing debit to the profit and loss account and credit to the machinery account. Those facts were sufficient to show that the statutory condition requiring creation of a reserve for development rebate had not been complied with. The omission, if any, was not one of primary fact but only a failure to draw the legal consequence from facts already before the Income-tax Officer. The filing of the balance-sheet would not have added to the material already disclosed.

Conclusion: The reopening under section 147(a) was not justified, as there was no omission by the assessee to disclose fully and truly all material facts.

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