In order to reopen an assessment under Section 148 of the Income-tax Act, 1961, the revenue must establish that there was omission or failure on the part of the assessee to disclose fully and truly material facts necessary for the assessment as a result of which income chargeable to tax escaped assessment.

( 1 ) THE assessment year involved in this application is 1963-64. The assessment for the aforesaid year was completed on 30th March, 1972 (? ). By a notice dated 30th March, 1972, the said assessment is sought to be reopened under Section 148 of the Income-tax Act, 1961. The said attempt is under challenge in this application under Article 226 of the Constitution.

( 2 ) THE petitioner which is a partnership firm states that the firm received a letter dated 21st June, 1971, on the 28th June, 1971, from the Income-tax Officer, "j" Ward, Dist. IV (I), Calcutta, whereby the petitioner was informed that there was information in the possession of the said Income-tax Officer on the basis of which the Income-tax Officer held that M/s. Atlas Agencies of 51/59, Dariastan Street, Bombay-3, was a concern of the petitioner. Accordingly, the Income-tax Officer wrote that the income of that concern should have been assessed in the hands of the petitioner. The petitioner was, therefore, asked to show cause why action should not be taken against him to reassess the alleged income of the petitioner for the assessment years 1963-1964, 1964-65 and 1965-66 for including the alleged income of M/s. Atlas Agencies in the hands of the petitioner. The petitioner states that the petitioner duly replied to the said show-cause notice stating that the said M/s. Atlas Agencies was not the concern of the petitioner. It is the further case of the petitioner in paragraph 9 of the petition that at the time of the original assessment, the petitioner's representatives, Mr. A. K. Sen and Mr. H. M. Mehta, had full discussion with the assessing Income-tax Officer with regard to the existence, the validity and the genuineness of all the parties with whom the petitioner had transactions including the said M/s. Atlas Agencies of Bombay. In the balance-sheet the name of the said M/s. Atlas Agencies along with others was disclosed and also a statement showing the details of sales and purchases with various parties including M/s. Atlas Agencies was filed before the Income-tax Officer. The petition has been verified by an affidavit of the said Hasmukhlal Mehta.

( 3 ) THE assessment order indicates that Mr. Sen and Mr. Mehta attended on behalf of the petitioner. Further, the assessment order also indicates that in respect of transactions with some other parties, the Income-tax Officer was not satisfied and had disallowed the transactions of those parties. There was a rectification of the said assessment and after that the rectification order also indicates that the Income-tax Officer, when he was not satisfied about the genuineness of the loan transaction, disallowed the interest thereon.

( 4 ) ALL these were stressed, in my opinion, rightly by the counsel for the petitioner, to indicate that the Income-tax Officer examined in detail the transactions with various parties to find out the genuineness of those transactions. It is also apparent that the transactions with Atlas Agencies were disclosed. It is the case of the petitioner in paragraph 9 of the petition that the question of genuineness, existence and validity of all the parties including M/s. Atlas Agencies were scrutinised by the Income-tax Officer at the time of the above assessment.

( 5 ) THE petition under Article 226 of the Constitution was filed on the ground that there was no material for the Income-tax Officer to form the belief for reassessing the income of the petitioner under Section 148 of the Income-tax Act as mentioned hereinbefore. The reopening, in view of the time lag, must have been under Clause (a) of Section 147 of the Income-tax Act, 1961. There must be materials from which the Income-tax Officer could form the belief that there was omission or failure on the part of the assessee to disclose truly or fully material facts, as a result of which failure and omission the income of the assessee has escaped assessment or has been under-assessed. There must be further evide