Reassessment under the 1922 income-tax law failed where nondisclosure was absent and a new point could not be raised in reference.

A reference on reassessment under section 34 of the Income-tax Act, 1922 turned on the limits of issues that could be argued before the High Court. A challenge to the validity of the minors' return could not be raised as a new point because the Tribunal had refused leave and the revenue had not used the proper reference procedure to question that refusal. Reopening under section 34(1)(a) required omission to file a return or failure to disclose fully and truly all material facts, and those conditions were not present on the accepted facts. Reliance on section 34(1)(b) also failed, and section 35 could not be invoked because no action had been taken under it.

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Issues: Whether the reopening of the assessment under section 34 of the Income-tax Act, 1922 was valid, including whether action could be sustained under clause (a) or clause (b) of section 34(1), and whether the revenue could canvass the validity of the return or invoke section 35.

Analysis: The challenge to the validity of the return filed by the minor assessees was not permitted to be raised as a new point at the reference stage. The Tribunal had refused permission to agitate that contention, and the revenue had not pursued the statutory route to get that refusal questioned. A point refused by the Tribunal and not brought up through the proper reference procedure could not be treated as open for consideration merely because it was said to be an aspect of the referred question. As the reference was framed under section 34(1)(a), that clause could apply only where there was omission or failure to make a return or to disclose fully and truly all material facts, neither of which existed on the accepted facts. The attempt to sustain the matter under section 34(1)(b) was also rejected, and the contention based on section 35 was not available because no action had been taken under that provision.

Conclusion: The reopening under section 34(1)(a) was invalid, the alternative reliance on section 34(1)(b) failed, and the revenue could not reopen the matter by pressing the validity of the return or section 35.

Ratio Decidendi: A question not permitted to be raised before the Tribunal, and not brought before the High Court through the proper reference procedure, cannot be canvassed as an aspect of the referred question; reassessment under section 34(1)(a) requires the statutory preconditions of omission or nondisclosure, and absent those conditions the reopening fails.

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