Primary facts disclosure governs reassessment; inferential non-disclosure alone cannot justify reopening under section 147(a).

Reassessment under section 147(a) of the Indian Income-tax Act, 1922 requires failure to disclose primary and material facts necessary for assessment; mere omission to state the inference to be drawn from facts already disclosed does not satisfy that condition. The assessee had placed the relevant orders and basic facts before the Income-tax Officer, enabling examination of whether the Bangalore concern was independent or merely a branch. As the alleged non-disclosure was only inferential and the additional factual notes were not the basis of the reopening belief, the precondition for jurisdiction under section 147(a) was not met and the reassessment notices under section 148 were invalid.

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Issues: Whether the reassessment notices issued under section 148 were without jurisdiction because the assessee had disclosed all primary facts and had not failed to disclose fully and truly all material facts necessary for assessment within section 147(a) of the Indian Income-tax Act, 1922.

Analysis: The material before the Income-tax Officer at the original assessments already included the orders relating to the Bangalore concern and disclosed the basic facts from which the department could examine whether that concern was an independent entity or merely a branch of the assessee. The legal obligation of the assessee extended only to disclosure of primary and basic facts, not to the disclosure of the inference to be drawn from those facts. The alleged non-disclosure relied on by the department was only an inferential matter and not a suppression of primary facts. The additional factual notes referred to by the department were not the basis on which the belief for reopening was formed and therefore could not sustain jurisdiction under section 147(a).

Conclusion: The condition precedent for invoking section 147(a) was not satisfied, and the reassessment notices under section 148 were invalid.

Final Conclusion: The writ petition succeeded and the notices for reassessment were quashed as the reopening was held to be without jurisdiction.

Ratio Decidendi: Reassessment under section 147(a) can be validly initiated only where there is failure to disclose primary and material facts necessary for assessment; omission to draw or state the legal inference from fully disclosed facts does not amount to such failure.

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