Full and true disclosure in reassessment requires primary facts; account books alone are not enough to bar reopening.

Reassessment under section 34(1)(a) of the Income-tax Act, 1922 was upheld because the assessee had not fully and truly disclosed all primary material facts necessary for assessment. The return did not explicitly disclose the sale of the cold storage building, machinery and furniture, or the resulting surplus over written down value, and mere production of account copies was not enough to satisfy the disclosure obligation. The Explanation to section 34(1)(a) confirmed that records from which facts could later be discovered by diligence do not by themselves amount to disclosure. The Revenue's invocation of reassessment was therefore sustained.

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Issues: Whether the reassessment under section 34(1)(a) of the Income-tax Act, 1922 was valid on the ground that the assessee had failed to disclose fully and truly all material facts necessary for the assessment.

Analysis: The assessment year was 1954-55 and the original assessment was completed under section 23(3). The material facts relating to the sale of the cold storage building, machinery and furniture, and the resulting surplus over the written down value, were not fully disclosed in the return. Mere filing of account copies did not amount to disclosure of the primary facts needed to enable the Income-tax Officer to apply section 10(2)(vii). The Explanation to section 34(1)(a) made it clear that production of records from which facts could be discovered with due diligence did not necessarily amount to disclosure. The court also held that the assessee could not reopen the issue of whether there was a sale, since that question was not before it.

Conclusion: The reassessment was validly initiated and section 34(1)(a) was rightly invoked; the answer was against the assessee and in favour of the Revenue.

Ratio Decidendi: For section 34(1)(a) of the Income-tax Act, 1922, the assessee must disclose all primary material facts, including the factual basis needed to identify taxable surplus, and production of books or accounts alone is insufficient where the essential facts are not explicitly disclosed.

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