Primary facts disclosure under income-tax reopening rules was sufficient; reassessment failed for lack of statutory conditions.

Section 34(1)(a) of the Indian Income-tax Act, 1922 required disclosure of primary facts necessary for assessment, not every inference or legal contention. The assessee had disclosed his share in the firm and stated that the share income was not included because it was being assessed in the hands of the Hindu undivided family. That disclosure was sufficient, and he was not required to add that the family disputed the assessment or to state the exact share income figure as the cause of non-assessment. On the facts, the escaped assessment resulted from the officer's assumption about the existing family assessment, so the reopening conditions were not met and were invalid.

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Issues: Whether the assessee failed to disclose fully and truly all material facts necessary for assessment so as to justify action under section 34(1)(a) of the Indian Income-tax Act, 1922.

Analysis: The assessee disclosed that he held a share in the firm and explained that he was not including the share income because it was being assessed in the hands of the Hindu undivided family. That disclosure contained the primary facts necessary for assessment. The law required disclosure of primary facts, not of every inference or legal contention. The assessee was not bound to state that the family was contesting the assessment, nor was the omission to state the exact figure of share income shown to be the cause of non-assessment. On the facts, the income escaped assessment because the Income-tax Officer proceeded on the existing course of assessment in the hands of the family and did not investigate the true position.

Conclusion: The conditions of section 34(1)(a) were not satisfied and the reopening was invalid; the issue is answered in favour of the assessee.

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