Full disclosure of primary facts defeats reassessment jurisdiction and renders a reopening notice invalid.

Reassessment under the Income-tax Act cannot be invoked where the assessee has fully and truly disclosed all primary facts necessary for assessment. The assessee had answered the Assessing Officer's specific queries on bonus shares and supplied complete particulars of acquisition, sale, price and accounting treatment, so there was no omission to disclose material facts. On that basis, the reopening lacked jurisdictional foundation and the notice, together with proceedings based on it, was invalid. The governing principle is that reassessment depends on a valid statutory basis and not on a later reappraisal of material already disclosed.

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Issues: Whether the notice issued for reassessment under the Income-tax Act, 1961 was without jurisdiction because the assessee had already disclosed all primary facts fully and truly, so that section 147(a) could not be invoked.

Analysis: The assessee had, before the original assessment, answered the Income-tax Officer's specific queries regarding the bonus shares and furnished full particulars as to their acquisition, sale, price, and accounting treatment. On those facts, the Court held that there was no omission or failure to disclose any primary facts necessary for assessment. The reopening was therefore not justified on the footing of section 147(a), and the jurisdictional foundation for the notice failed. The Court also observed that the validity of the notice depended on the existence of jurisdiction under the reopening provisions, and that the facts disclosed in the assessee's reply were sufficient for the original assessment authority to draw the necessary inferences.

Conclusion: The reassessment notice and all proceedings founded on it were invalid and liable to be quashed, in favour of the assessee.

Final Conclusion: The Court annulled the reopening proceedings because the assessee had made complete disclosure of primary facts and the statutory precondition for reassessment was not satisfied.

Ratio Decidendi: Reassessment cannot be initiated where the assessee has fully and truly disclosed all primary facts necessary for assessment, because the jurisdiction to reopen depends on a valid statutory basis and not on a mere change of view or later attempt to reappraise disclosed material.

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