Reopening of assessment requires contemporaneous recorded reasons and bona fide belief; later reasons cannot cure invalid initiation.

Reopening of assessment under section 147(a) depends on two conditions: the assessee must have failed to disclose fully and truly all material facts, and the Income-tax Officer must have recorded contemporaneous reasons showing a bona fide belief that income escaped assessment. Here, the omission of income in the relevant year amounted to non-disclosure, so the assessee could not resist reopening on that ground. However, the reassessment failed because the only recorded basis for initiation was the Commissioner's direction, with no contemporaneous record of the Officer's own requisite belief. Later reasons could not cure that defect, so the reassessment was without jurisdiction.

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Issues: (i) Whether the assessee had failed to disclose fully and truly all material facts so as to attract reopening of the assessment for 1955-56 under section 147(a); (ii) Whether the Income-tax Officer had recorded relevant reasons and entertained the requisite belief before issuing notice, so that the reassessment was within jurisdiction.

Issue (i): Whether the assessee had failed to disclose fully and truly all material facts so as to attract reopening of the assessment for 1955-56 under section 147(a).

Analysis: The amount of Rs. 36,000 had accrued and been adjusted during the accounting year relevant to 1955-56, but it was not included in the return for that year. The later inclusion of the amount in another assessment did not erase the earlier omission. The relevant question was whether, at the time of the original assessment for 1955-56, there had been non-disclosure of income material to that assessment.

Conclusion: The assessee had failed to disclose the income for 1955-56, and the reopening could not be defeated on that ground in favour of the assessee.

Issue (ii): Whether the Income-tax Officer had recorded relevant reasons and entertained the requisite belief before issuing notice, so that the reassessment was within jurisdiction.

Analysis: The statutory scheme required the Income-tax Officer, before issuing notice, to record reasons showing belief that income had escaped assessment by reason of the assessee's failure to disclose material facts. The only recorded basis for initiating proceedings was the direction of the Commissioner, and there was no contemporaneous record that the Officer had formed the requisite belief. The existence of later reasons in the reassessment order could not cure the absence of valid initiation under the statute.

Conclusion: The jurisdictional requirement was not satisfied, and the reassessment was without jurisdiction.

Final Conclusion: Although there was non-disclosure of income for the relevant year, the statutory precondition of a recorded and relevant belief at the stage of initiation was absent, so the reassessment could not be sustained.

Ratio Decidendi: Reopening under section 147(a) is valid only when the Income-tax Officer has, before issuing notice, recorded reasons showing a bona fide belief that income escaped assessment because of the assessee's failure to disclose fully and truly all material facts; absence of such contemporaneous reasons renders the reassessment without jurisdiction.

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