P. B. MUKHARJI, C. J.

( 1 ) THE Tribunal referred this question as in its opinion a question of law arises on the facts of this case. The question of law in the statement of the case referred to is as follows :"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the reassessment proceedings under Section 34 (1) (a) of the Indian Income-tax Act, 1922, were not validly initiated ?"the facts of the case may be stated briefly at the outset. It relates to the assessment year 1955-56 and the corresponding previous year ended on the 30th June, 1954. The only question before the Tribunal relates to the validity of reassessment under Section 34 (1) (a) of the Income-tax Act of 1922 for the assessment year 1955-56. The original assessment was made by the Income-tax Officer on a total income of Rs. 83,606. This was reduced in appeal to Rs. 67,092. Subsequently the Income-tax Officer reopened the assessment and in the reassessment that followed he included the sum of Rs. 61,353 as "exchange profit". The profit arose out of remittance made from Pakistan in respect of two bank drafts dated 12th March, 1954, and 23rd April, 1954, drawn by the Muslim Commercial Bank Ltd. , Karachi, and payable by the Allahabad Bank Ltd. at Calcutta. In the balance-sheet of the assessee-company as at 30th June, 1954, the assessee had shown the sum of Rs. 61,352-12-6 as " Reserve for exchange--Being exchange surplus on remittance from Pakistan " and the balance-sheet was laid before the Income-tax Officer when the original assessment was made. The Income-tax Officer, however, did not tax the exchange surplus in the original assessment. Subsequently, the Income-tax Officer in the course of the proceeding for the assessment year 1961-62 noticed that the said amount had escaped assessment and he issued a notice under Section 34 (1) (a) to bring the amount to tax after obtaining the sanction of the Commissioner of Income-tax.

( 2 ) IN response to the notice issued by the Income-tax Officer the assessee filed a return showing the same income as that which had been originally assessed. The assessee's contentions before the Income-tax Officer were: (1) that the proceeding in reassessment under Section 34 (1) (a) was invalid as there was no non-disclosure of facts on the part of the assessee. (2) that the surplus arising on exchange was receipt of a casual nature which arises in consequence of the decision of the Government of India to devalue its currency and it was, therefore, not a receipt of revenue nature assessable to tax. The Income-tax Officer rejected both the

contentions of the assessee. The Appellate Assistant Commissioner confirmed the reassessment. The Tribunal, however, accepted the contention of the assessee. The Tribunal held that the assessee cannot be said to have failed in its discharge of duty to disclose fully and truly primary facts and in doing so appears to have followed the case of Calcutta Discount Co. Ltd. v. Income-tax Officer, of the Supreme Court. The Tribunal's reasoning on the point may be stated in their own words:"in the present case, when the assessee had specifically referred to the existence of the exchange surplus in its balance-sheet which was laid before the Income-tax Officer, it cannot be said that there was any failure or omission on the part of the assessee in the disclosure of the primary facts. It is possible that the Income-tax Officer who made the original assessment had accepted the case of the assessee that the receipt was of a casual and non-trading nature ; it is also possible that the Income-tax Officer had just shut his eyes to the relevant entry in the balance-sheet. In any case, it is not possible to say that the assessee omitted to make a full and truthful disclosure of the relevant facts. That being the case, we are of the view that the Income-tax Officer had no jurisdiction to issue the notice under section 34 (1) of the Income-tax Act, 1922, and, therefore, the

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