Full and true disclosure governs reassessment jurisdiction under income-tax law; undisclosed primary facts sustain section 148 notice.

Reassessment under section 148 is valid where the Income-tax Officer has reason to believe income escaped assessment because the assessee did not fully and truly disclose all material primary facts. Mere production of account books or balance-sheets is insufficient unless the specific primary fact is brought to the assessing officer's notice. On the stated record, there was no satisfactory intrinsic or corroborative material showing that the disputed cash transaction was disclosed in the original proceedings, and the assessment records did not show that it had been explained earlier. The notice under section 148 was therefore within jurisdiction, as full and true disclosure was not established.

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Issues: Whether the notice for reassessment under section 148 of the Income-tax Act, 1961 was without jurisdiction on the ground that the assessee had fully and truly disclosed all primary facts necessary for the original assessment and that the conditions precedent under section 147 were not satisfied.

Analysis: The validity of reassessment depends on the Income-tax Officer having reason to believe that income had escaped assessment because of the assessee's omission or failure to disclose fully and truly all material facts. The duty of disclosure extends to primary facts, and mere production of account books or balance-sheets is not enough unless the impugned primary fact is specifically brought to the notice of the assessing officer. On the record, there was no satisfactory intrinsic or corroborative material to show that the specific cash transaction was disclosed in the original assessment proceedings, and the assessment records did not indicate that the disputed item had been explained to the earlier assessing officer.

Conclusion: The notice under section 148 was valid and within jurisdiction; the assessee failed to establish full and true disclosure of the relevant primary facts.

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