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Section 147(a) of the Income-tax Act, 1961 - Reassessment - Non-disclosure of primary facts - Assessment years 1983-84 and 1984-85 - ITO reopened assessments of the assessee under section 147(a) for reasons (i) that payment of commission to one M was bogus, and (ii) that purchases from one D were partly not genuine - In original assessment proceedings, assessee had furnished details including details about commission payment and also filed list of names and addresses of persons from whom it made purchases exceeding Rs. 1 lakh and ITO completed assessments long thereafter - Whether reassessement was justified - Held, no FACTS The ITO reopened the assessments of the assessee under section 147(a) for the reasons (i) that the payment of commission to one M was bogus, and (ii) that the purchases from one D were partly not genuine. On writ: HELD It is well-settled that after the assessee has disclosed material facts fully and truly it is for the ITO to draw correct inference therefrom. If he had drawn one inference at the time of original assessment, it was not open to him to say on the basis of some enquiry in a subsequent assessment proceedings that the material facts disclosed originally were not disclosed fully and truly. In the instant case, the assessee furnished details asked for by the ITO including details about the commission payments. It also filed the list of names and addresses of persons from whom it had made purchases exceeding Rs. 1 lakh. The assessments were completed under section 143(3) long thereafter. Thus, when the ITO completed the assessments, necessary material was before him. Hence, the issue of notice under section 148, read with section 147(a), was without jurisdiction and liable to be quashed. CASES REFERRED TO CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609 (SC), ITO v. Madnani Engg. Works Ltd. [1979] 118 ITR 1 (SC) and Nawabganj Sugar Mills Co. Ltd. v. CIT [1980] 123 ITR 287 (Delhi). Soli Dastur, Jahangir Mistry and W. Menezes for the Petitioner. Dr. V. Balsubramanian for the Respondent. JUDGMENT 1. By these two petitions under article 226 of the Constitution, the petitioner-company has challenged the jurisdiction of the ITO to issue…

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