Full disclosure of primary facts defeats reassessment where later inferences or assessments reveal additional tax consequences.

Reassessment under the income-tax reassessment provision could not be sustained because the assessee had disclosed the primary material facts: the partnership's existence, the dispute over its affairs, the High Court proceedings, the judgment, and the explanation for the return entry. The obligation is limited to disclosure of basic facts, not the inferences to be drawn from them. Since the assessee did not know at the time of filing that the partnership would ultimately be found to yield profits, a later assessment and post-assessment protest letters could not retrospectively turn a true disclosure into suppression. Reassessment was therefore invalid.

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Issues: Whether reassessment under section 34(1)(a) was valid on the ground that the assessee had omitted or failed to disclose fully and truly all material facts necessary for assessment.

Analysis: The relevant obligation under section 34(1)(a) is confined to disclosure of primary or material facts, not the inferences to be drawn from them. The assessee had disclosed the existence of the partnership, the dispute concerning its affairs, the High Court proceedings, and the High Court judgment, and had explained the entry made in the return by the later letter. At the time of the return and assessment, the assessee did not know that the partnership would ultimately be found to yield profits, and the subsequent partnership assessment could not retrospectively convert a true disclosure into suppression. The later protest letters, written after completion of the assessment, did not affect the position as on the date of disclosure.

Conclusion: The assessee had not failed to disclose fully and truly all material facts, and the reassessment under section 34(1)(a) was not valid.

Ratio Decidendi: Reassessment under section 34(1)(a) cannot be sustained unless the assessee knowingly withholds primary or material facts; a true disclosure of the basic facts, leaving the inference or computation to the taxing authority, is sufficient.

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