The Income-tax Officer may reopen the assessment under Section 147(a) of the Income-tax Act, 1961, if he has reason to believe that material facts were not disclosed fully or truly by the assessee.

O.Chinnappa Reddy, J.

1. For the assessment year 1962-63, the Income-tax Officer assessed the assessee on April 21, 1964, on a total income of Rs. 11,510. In the balance-sheet of the assessee, there appeared cash credits in the names of Hundal Dass Vasu Mal, Chopra Trading Company and five others. The assessee produced evidence before the Income-tax Officer about the genuineness of the cash credits. The Income-tax Officer enquired into the genuineness of the cash credits and accepted them as true. It was^bnly thereafter that he completed the assessment. Later, a huge hundi racket operating on an all-India basis was unearthed and broken. Income-tax Officers all over the country got busy and started further probes irtto the affairs of various assessees. Some of the creditors shown in the balance-sheet of the assessee made confessional statements to the effect that they were lending names and not money. Thereupon, the Income-tax Officer issued a notice to the assessee under Section 148 of the Income-tax Act, 1961, reopened the assessment and added a sum of Rs. 1,60,000 to the income of the assessee. The appeals filed by the assessee to the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal were dismissed. Before the Income-tax Appellate Tribunal, it was contended that the assessee had made a true and full disclosure of all primary facts even at the time of the original assessment and, therefore, the Income-tax Officer was not justified in reopening the assessment under Section 147(a). The Income-tax Appellate Tribunal disagreed with the submission of the assessee and held that the Income-tax Officer was justified in reopening the assessment. At the instance of the assessee, the Tribunal has referred to us the following question for our opinion :

"Whether, on the facts and in the circumstances, the Income-tax Appellate Tribunal, Chandigarh, has rightly upheld the reopening of the assessment under Section 147(a) of the Income-tax Act, 1961 ? "

2. Shri Bhagirath Dass, learned counsel for the assessee, argued that the assessee had disclosed all the primary facts at the time of the original assessment and the Income-tax Officer, after enquiry, had accepted the genuineness of the cash credits. The Income-tax Officer had later changed his opinion merely because some " hundi racket " unconnected with the assessee had baen unearthed. The Income-tax Officer was not entitled to do so. Shri Bhagirath Dass relied upon the well-known cases of Calcutta Discount Co. Ltd. v. Income-tax Officer [1961] 41 ITR 191 (SC) and Commissioner of Income-tax v. Bhanji Lavji [1971] 79 ITR 582 (SC) and the decision of a learned single judge of this court in Karam Chand Kakkar v. Income-tax Officer [1974] 93 ITR 198 (Punj). On the other hand, Shri Awasthy, learned counsel for the department, argued that the obligation on the assessee was to disclose the facts both fully and truly and if the Income-tax Officer had reason to believe that material facts had not been truly disclosed he was competent to reopen the assessment. It would be a case of truth coming to light and not a mere change of opinion. Shri Awasthy relied upon the decisions of the Supreme Court in Chhugamal Rajpal v. S.P. Chaliha [1971] 79 ITR 603 (SC) and Income-tax Officer v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) and of a learned single judge of this court in Hiralal Dewan Chand v. Income-tax Officer [1974] 93 ITR 204 (Punj).

3. Section 147 of the Income-tax Act, 1961, in so far as it is relevant for the purposes of Irie present case, is as follows :

"147. Income escaping assessment.--If-- (a) the Income-tax Officer has reason to believe that, by reason of the ommission or failure on the part of an assessee...to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year... he may......assess or reassess such income......for the assessment year concerned....."

4. The expressio