Judgment Nazir Ahmad, J. 1. The three taxation cases are being disposed of by a consolidated order, as in all the three taxation cases the parties are the same and the cases have been argued by the same set of lawyers and all the three taxation cases relate to the same assessment year 1965-66. Taxation Case No. 263 of 1976 relates to the second reassessment under Sec.17 of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"). Taxation Case No. 83 of 1974 relates to the penalty under Sec.18(1)(a) of the Act. Taxation Case No. 52 of 1974 relates to the allowance of tax liability for the assessment year 1965-1966. Taxation Cases Nos. 83 of 1974 and 52 of 1974 depend on the decision in Taxation Case No. 263 of 1976. Under such circumstances, I proceed to decide Taxation Case No. 263 of 1976 first. 2. The facts of Taxation Case No. 263 of 1976 may be briefly culled from the statement of the case. The assessce is an individual and the valuation date for the assessment year 1965-66 is November 4, 1964. The original assessment order under Sec.16(3) of the Act was made on October 28, 1965, on a total wealth of Rs. 5,27,132. A copy of the original assessment order has been annexed and marked as annexure-A forming part of the statement of the case in Taxation Case No. 52 of 1974. 3. On May 31, 1965, the assessee filed before the Commissioner of Income-tax a petition under the Finance Act, 1965 , disclosing unassessed income of Rs. 25 lakhs which was held in the shape of Rs. 3,000 worth of shares in Bank of Bihar Limited, Rs. 9,80,000 worth of Premium Prize Bonds and Rs. 15,17,000 in cash. The Wealth-tax Officer reopened the original assessment under Sec.17 of the Act and reassessed the total wealth as per his order dated March 25, 1966, at Rs. 20,47,132. The Wealth-tax Officer in his first reassessment order added the value of share of Rs. 3,000 and the cash of Rs. 15,17,000 but he did not include the third item, namely, Rs. 9,80,000 worth Premium Prize Bonds. A copy of the first reassessment order of the Wealth-tax Officer has been annexed and marked as annexure-B forming part of the statement of the case in Taxation Case No. 52 of 1974. 4. 3,000 and the cash of Rs. 15,17,000 but he did not include the third item, namely, Rs. 9,80,000 worth Premium Prize Bonds. A copy of the first reassessment order of the Wealth-tax Officer has been annexed and marked as annexure-B forming part of the statement of the case in Taxation Case No. 52 of 1974. 4. The Wealth-tax Officer took action for the second reassessment as he had not included the amount of Rs. 9,80,000 worth of Premium Prize Bonds in the first reassessment order. He issued notice to the assessee for the second reassessment order and the second reassessment was completed on August 31, 1970, on a total income of Rs. 30,20,930 including the amount of Rs. 9,80,000. This second reassessment order of the Wealth-tax Officer has been annexed and marked as annexure-C forming part of the statement of the case in Taxation Case No. 52 of 1974. The second reassessment order has also been annexed in Taxation Case No. 263 of 1976, and has been marked as annexure-A forming part of the statement of the case. 5. The assessee appealed before the Appellate Assistant Commissioner and contended that the Wealth-tax Officer did not have any information from the wealth-tax records to show that any asset or any wealth had escaped assessment and, therefore, he was not justified in initiating proceedings under Sec.17 of the Act. It was pointed out by the Appellate Assistant Commissioner that the appellants disclosure petition before the Commissioner of Income-tax was available to the Wealth-tax Officer through the income-tax file of the Income-tax Officer who was the same officer and such information could be considered as sufficient information to enable the Wealth-tax Officer to presume that the wealth or asset had escaped assessment. On this point, the assessee urged that the Wealth-tax Officer and the Income-tax Officer may be the same person for the convenience of Direct Tax Administration but it is not supposed that the Wealth-tax Officer will import his knowledge from the income-tax file about certain materials on the basis of which proceedings under Sec.17 of the Act could be initiated. The Appellate Assistant Commissioner considered the arguments and came to the conclusion that the Wealth-tax Officer was justified in initiating proceedings which he had done on account of information received by him from any source available to him. The Appellate Assistant Commissioner considered the arguments and came to the conclusion that the Wealth-tax Officer was justified in initiating proceedings which he had done on account of information received by him from any source available to him. He pointed out that the law is very clear on this point as Sec.17 only indicates that the Wealth-tax Officer should have reason to believe that the net wealth chargeable to tax had escaped assessment or the Wealth-tax Officer had, in consequence of information in his possession, reason to believe that the net wealth chargeable to tax had escaped assessment. Accordingly, he rejected the argument of the assessee. A copy of the order of the Appellate Assistant Commissioner has been annexed and marked as annexure-B forming part of the statement of the case in Taxation Case No. 263 of 1976. 6. The assessee then came in appeal before the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") and contended that the second reassessment dated August 31, 1970, made by the Wealth-tax Officer was bad in law. He stated that the assessee disclosed fully and truly all material facts necessary for assessment of his net wealth in his petition dated May 31, 1965, which was even prior to the original assessment made on October 28, 1965, and that the assessee owned Rs. 9,80,000 worth of Premium Prize Bonds which was known to the Wealth-tax Officer on March 25, 1966, when he made the first reassessment including two of three items disclosed in the disclosure petition dated May 31, 1965. He, therefore, contended that the Wealth-tax Officer was not justified in resorting to Sec.17 of the Act for the second time. The assessee contended that Sec.17(b) of the Act can be invoked only if some information comes into the possession of the Wealth-tax Officer subsequent to the completion of the original assessment and this condition was not satisfied. The assessee asserted that Sec.17(a) can be invoked only if the assessee failed to disclose fully and truly all material facts necessary for the assessment of net wealth but in this case all the material facts were known to the Wealth-tax Officer not on the date when he completed the original assessment on October 28, 1965, but certainly on March 25, 1966. 7. 7. The departmental representative before the Tribunal supported the order of the Appellate Assistant Commissioner, He stated that the case was not reopened under Sec.17(b) but under Sec.17(a) of the Act. He stated that the assessee did not disclose fully and truly all facts necessary for the assessment of his net wealth in the original return filed by him on September 30, 1965, and that the material fact was the ownership of the Premium Prize Bonds in question. This wealth escaped assessment even after the first reassessment on March 25, 1965. The departmental representative argued before the Tribunal that the escapement of the value of Premium Prize Bonds in question was the direct result of the omission of the assessee to declare the same in the original return. The departmental representative further stated that when the Wealth-tax Officer made the first reassessment on March 25, 1966, he did not include the value of the Premium Prize Bonds in question on the erroneous belief that the same was exempt from tax and when he found the error, he took steps to reassess the wealth for the second time. 8. The Tribunal considered whether the escapement of the value of the Premium Prize Bonds in question can be said to be the result of the assessees failure to disclose fully and truly the material facts or due to the failure of the Wealth-tax Officer to do his duty. The Tribunal held that the escapement of the assessment of the Premium Prize Bonds in question was not due to the former but due to the latter. The Tribunal also held that once the Wealth-tax Officer knew about the existence of the Premium Prize Bonds from any source whatsoever, the assessees duty to disclose the same came to an end. The Tribunal also held that a thing not known to the Wealth-tax Officer can alone be disclosed to him. The Tribunal relied on the decision in Dunlop Rubber Co. Ltd. (London) V/s. ITO [ 1971 ] 79ITR 349 (Cal) and came to the conclusion that the condition precedent for invoking Sec.17 was not satisfied and the second reassessment order passed by the Wealth-tax Officer was bad in law and so it was cancelled. A copy of the order of the Tribunal has been annexed and marked as annexure-C forming part of the statement of the case in Taxation Case No. 263 of 1976. 9. A copy of the order of the Tribunal has been annexed and marked as annexure-C forming part of the statement of the case in Taxation Case No. 263 of 1976. 9. On these facts, the following question of law has been referred by the Tribunal to this court in compliance with the order passed by this court in Taxation Case No. 263 of 1976 for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding the second reassessment order passed by the Wealth-tax Officer under Sec.17 of the Wealth-tax Act on August 31, 1970, to be bad in law?" 10. Mr. B.P. Rajgarhia, senior standing counsel for the Revenue, has relied on various decisions for his proposition that reassessment can be made several times. For this purpose, he has relied on the case of Jagmohan Goenka V/s.K.D. Banerjee [1954] 26 ITR 637 (Cal) where it has been held that within the time limit specified in Sec.34 of the Indian Income-tax Act, 1922, there is no restriction as to the number of proceedings that can be taken to reopen the assessment whether by way of assessment or reassessment, computation or recomputation and that only if the process of reassessment is repeated mala fide, the High Court can and will always interfere. It has also been held in this decision that assessment means the computation of the assessees income upon which attaches the incidence of taxation and includes the whole process which leads up to it and that reassessment is only one of the processes by which the final goal is reached and Sec.34 has been framed so as to enable the Income-tax authorities to reach that goal. In this decision also, it is stated that in May-June, 1948, notice under Sec.22(2) read with Sec.34 of the Indian Income-tax Act, 1922, was served upon the assessee for reopening the assessment for the year 1946-47. The reason given for this was that the assessee had not disclosed the fact that he had received a sum of Rs. 12,246-10-0 as bonus from the Government of India. The reassessment was made on June 29, 1948. The original assessment order for the assessment year 1946-47 was made on September 18, 1946. The reason given for this was that the assessee had not disclosed the fact that he had received a sum of Rs. 12,246-10-0 as bonus from the Government of India. The reassessment was made on June 29, 1948. The original assessment order for the assessment year 1946-47 was made on September 18, 1946. Again on March 26, 1951, notice was issued upon the petitioner under Sec.34 of the aforesaid Act in respect of the assessment year 1946-47 and the ground was also underassessment in this case. The petitioner complied with the notices under protest. By an order of assessment dated March 14, 1952, the petitioner was assessed upon a total income of Rs. 20,45,414 for the assessment year 1946-47 when originally the assessment was only on a total income of Rs. 55,414. In this decision, it has been pointed out by his Lordship of the Calcutta High Court that a case of underassessment can arise because the assessee had not disclosed his proper income or because the Income-tax Officer had fallen into an error in computing it or that it may be caused by deliberate concealment on the part of the assessee or a mere accident or error on his part or on the part of the officer carrying out the assessment. The Calcutta High Court pointed out various circumstances. It has been pointed out that the assessee discloses a certain income from his shop in Calcutta and no others and is assessed accordingly. It is discovered next year that he had another shop at Bikaner and had not disclosed the income from that shop. Under Sec.34, he can clearly be proceeded against. The income from Bikaner shop had escaped assessment but the assessee had also been under assessed. His Lordship of the Calcutta High Court has also pointed out that supposed he was proceeded against under Sec.34 and his income from the Bikaner shop was taken into consideration and two years later it was discovered that he had a third shop at Indore and had concealed the income. His Lordship held that the authorities were not powerless to take proceedings in respect thereof. His Lordship also considered on supposition that it is subsequently found that in computing the income of the Calcutta shop, he had concealed the fact that it dealt with a lucrative Government contract from which he received a substantial income. His Lordship held that the authorities were not powerless to take proceedings in respect thereof. His Lordship also considered on supposition that it is subsequently found that in computing the income of the Calcutta shop, he had concealed the fact that it dealt with a lucrative Government contract from which he received a substantial income. This income may be said to have escaped assessment and also the result is an underassessment. His Lordship held that although there were previous proceedings, a further action can be taken. His Lordship also took an instance for the purpose of explaining the case. He pointed out supposing that after all the proceedings had been completed, it is discovered that in adding up the income of the Calcutta shop, the Income-tax Officer had left out an item of a lakh of rupees which will certainly mean that it was a case of underassessment and also that this sum had escaped assessment and in such a case also the assessee cannot escape reassessment. Thus, from this decision, it is evident that a number of reassessments can be made. Similar view has been taken in the case of Gurdayal Berlia V/s. CIT [1966] 62 ITR 494 (Cal). In this decision also the Income-tax Officer was held to have acted within his jurisdiction in initiating a proceeding under Sec.34(1)(a) of the Indian Income-tax Act, 1922, for the second time when he thought that there was non-disclosure of a primary fact at the time of the first assessment. In this decision also reliance was placed on the decision in Jagmokan Goenka V/s. K.D. Banerjee [1954] 26 ITR 637 (Gal). 11. Sections 34(1)(a) and 34(1)(b) of the Indian Income-tax Act, 1922, are similar to the provisions of Sections 147(a) and 147(b) of the Income-tax Act, 1961, and similar to Sections 17(1)(a) and 17(1)(b) of the Act. 12. Mr. K.N. Jain, learned advocate for the assessee, has fairly conceded that within the time limit specified in Sec.17 of the Act, there is no restriction as to the number of proceedings that can be taken to reopen the assessment whether by way of assessment or reassessment, computation or recomputation of income. The argument of Mr. K.N. Jain is that there can be no reassessment for the second time in view of the circumstances of the case before us. 13. The argument of Mr. K.N. Jain is that there can be no reassessment for the second time in view of the circumstances of the case before us. 13. Before I proceed with the facts of this case, it is necessary to refer to Sec.17 of the Act. Sec.17 of the Act is as follows : "17. Wealth escaping assessment.--(1) If the Wealth-tax Officer-- (a) has reason to believe that by reason of the omission or failure on the part, of any person to make a return under Sec.14 of his net wealth or the net wealth of any other person in respect of which he is assessable under this Act for any assessment year or to disclose fully and truly all material facts necessary for assessment of his net wealth or the net wealth of such other person for that year, the net wealth chargeable to tax has escaped assessment for that year, whether by reason of underassessment or assessment at too low a rate or otherwise ; or (b) has, in consequence of any information in his possession, reason to believe, notwithstanding that there has been no such omission or failure as is referred to in Clause (a), that the net wealth chargeable to tax has escaped assessment for any year, whether by reason of underassessment or assessment at too low a rate or otherwise ; he may, in cases falling under Clause (a) at any time within eightyears and in eases falling under Clause (b) at any time within four years of the end of that assessment year, serve on such person a notice containing all or any of the requirements which may be included in a notice under Sub-Section (2) of Sec.14, and may proceed to assess or reassess such net wealth, and the provisions of this Act shall, so far as may be, apply as if the notice had issued under that sub-section." 14. Mr. B.P. Rajgarhia has referred to the original order, annexure A, in Taxation Case No. 52 of 1974, which shows that the Wealth-tax Officer, Ward A, Colliery Circle, Dhanbad, assessed the total net wealth of the assessee at Rs. 5,27,132 on October 28, 1965. It is not disputed that on October 28, 1965, the Wealth-tax Officer had no knowledge about the shares of Bank of Bihar Limited, about the cash of Rs. 15,17,000 and about the Premium Prize Bonds of Rs. 9,80,000. 5,27,132 on October 28, 1965. It is not disputed that on October 28, 1965, the Wealth-tax Officer had no knowledge about the shares of Bank of Bihar Limited, about the cash of Rs. 15,17,000 and about the Premium Prize Bonds of Rs. 9,80,000. It is the admitted case of both parties that on May 31, 1965, the assessee filed before the Commissioner of Income-tax a petition under the Finance Act, 1965 , disclosing unassesscd income of Rs. 25 lakhs which was held in the shape of Rs. 3,000 worth of shares in the Bank of Bihar Limited, Rs. 9,80,000 worth of Premium Prize Bonds arid Rs. 15,17,000 in cash. However, when the Income-tax Officer reopened the assessment proceedings and made the first reassessment, he was aware of all these details. Annexure-B in Taxation Case No. 52 of 1974 is a copy of the first reassessment order dated March 25, 1966. The Wealth-tax Officer has mentioned in the first reassessment order that the assessee has strongly asserted that a sum of Rs. 25 lakhs disclosed on May 31, 1966, cannot be included in the net wealth for the assessment year 1965-66 ended on November 14, 1964, as according to the assessee the not wealth comes after the previous year ending November 4, 1964. The assessee also contended before the Wealth-tax Officer that the disclosed sum consisted of Rs. 15,17,000 in cash, Rs. 9,80,000 in Premium Prize Bonds and Rs. 3,000 in shares of Bank of Bihar Limited, as filed by the assessee. The Wealth-tax Officer took the view that the assessee cannot submit specific evidence to prove that the amount was earned between November 5, 1964, and May 31, 1965, and so he is presumed to have wealth in his possession on the valuation date, i.e., November 4, 1964. While computing the net wealth of the assessee, he took the net wealth as per the original assessment at Rs. 5,27,132 and added to it the cash amount of Rs. 15,17,000 and shares of Bank of Bihar Limited at face value at Rs. 3,000 and took the assessees total net wealth at Rs. 20,47,132. Though the Wealth-tax Officer knew about the Premium Prize Bonds worth Rs. 9,80,000 when he was making the first reassessment, he did not include it in the net wealth of the assessee in the first reassessment. 15,17,000 and shares of Bank of Bihar Limited at face value at Rs. 3,000 and took the assessees total net wealth at Rs. 20,47,132. Though the Wealth-tax Officer knew about the Premium Prize Bonds worth Rs. 9,80,000 when he was making the first reassessment, he did not include it in the net wealth of the assessee in the first reassessment. Subsequently, he issued notice for the second reassessment on October 13, 1969, under Sec.17 of the Act, which was served on the same day. The due date to file the return was within 35 days of the receipt of the notice, i.e., on or before November 17, 1969, but the return was filed on February 19, 1970. This will be evident from the penalty order of the Wealth-tax Officer, Special Circle, Dhanbad, under Sec.18(1)(a) of the Act for the assessment year 1965-66. A copy; of the penalty order of the Wealth-tax Officer has been annexed and is annexure A forming part of the statement of the case in Taxation Case No, 83 of 1974. Annexure C in Taxation Case No. 52 of 1974 is a copy of the second reassessment order which shows that the net wealth as per the first reassessment was Rs. 20,47,132 to which he added the amount of Rs. 9,80,000 as the value of the Premium Prize Bonds, out of which he allowed the wealth-tax liability to the extent of Rs. 6,200 and thus the total net wealth came to Rs. 30,20,932, which he took in a round sum at Rs. 30,20,930. This second reassessment was made on August 31, 1970. The assessee had filed return on February 19, 1970, showing net wealth of Rs. 9,12,932, which shows that the value of Premium Prize Bonds of Rs. 9,80,000 was not shown in this return. 15. Mr. B.P. Rajgarhia on these facts has submitted that neither at the time of original assessment order on October 28, 1965, the amount of Premium Prize Bonds of Rs. 9,80,000 was shown nor was the same shown in the return filed at the time of second reassessment and so the assessee should be deemed to have concealed this net wealth of Rs. 9,80,000, and so the second reassessment was a valid reassessment. 9,80,000 was shown nor was the same shown in the return filed at the time of second reassessment and so the assessee should be deemed to have concealed this net wealth of Rs. 9,80,000, and so the second reassessment was a valid reassessment. For this purpose, he has relied on the case of Gurdayal Berlia V/s. CIT [1966] 62 ITR 494 (Cal) where it has been held at page 501 that if the assessee fails to disclose fully and truly all material facts, then a reassessment under Sec.34(1)(a) of the Indian Income-tax Act, 1922, can be made by the Income-tax Officer. 16. It has been held in the case of CIT V/s. T.S.PL.P. Chidambaram Chettiar [1971] 80 ITR 467 (SC) by their Lordships of the Supreme Court that the reassessment proceedings were valid as the requirements of Sec.34(1)(a) were fully satisfied and the fact that there was some vague information before the officer at the time of the original assessment that the assessees father had secretly received a sum of Rs. 1,50,000, from the mortgagor was by itself not sufficient to bring to tax that amount particularly in view of the fact that the assessee had denied the fact. It has also been held in this decision that the fact that the officer could have made further enquiry into the matter but did not do so, did not take the case out of Sec.34(1)(a) as the assessee had failed to place truly and fully all material facts before him. Thus, it is evident that if the assessee fails to disclose fully or truly all material facts necessary for assessment of his net wealth, then it cannot be doubted that action under Sec.17(1)(a) of the Act can be taken by the Wealth-tax Officer. 17. It also cannot be doubted that if the assessee makes full and true disclosure of all material and primary facts, then the Income-tax Officer has to draw infer ences and conclusions and if the Income-tax Officer does not do so, there can be no reassessment For this purpose, Mr. B.P. Rajgarhia placed reliance on the case of Nawabganj Sugar Mills Co. Ltd. V/s. CIT [1980] 123 ITR 287 (Delhi). B.P. Rajgarhia placed reliance on the case of Nawabganj Sugar Mills Co. Ltd. V/s. CIT [1980] 123 ITR 287 (Delhi). In this decision, the three assessee-companies controlled by the Narang Group carried on the business of manufacture and sale of sugar and these companies claimed deduction of selling agency commission of 12 annas per cent, to G and Co. on the entire sales of sugar in computing their profits. In the original assessments ranging between the assessment years 1947-48 and 1951-52, the Income-tax Officer called for information and the assessees produced board resolutions appointing G and Co. as the selling agency and also claimed that G and Co. were active and doing the same work as all other selling agents, that they were in sole charge of the sales and appointed sub-agents to whom they paid commission from their own pockets, that they were responsible for conducting the sale honestly and diligently and also if there was any loss in delivery. Thus, without specifically discussing the nature and basis for allowing the commission to G and Co., the Income-tax Officer completed the original assessment allowing the commission as a deduction. Thereafter, during the course of proceedings for subsequent assessment years 1951-52 and 1952-53, the Income-tax Officer probed in detail into the nature and basis for allowance of commission to G and Co. and found that: (i) there were no selling agency agreements executed and no terms and conditions had been settled; (ii) no resolution had been passed by G and Co. agreeing to act as selling agent of the assessee; (iii) G and Co. were not required to and did not in fact render any service; (iv) sub-agents communicated directly with the assessees and obtained commission from them and G and Co, possessed no material correspondence to show that the sales were effected through it; (v) sales were entered into directly by the assessees with the buyers and sale proceeds were realised through bank. On this finding, the Income-tax Officer disallowed deduction of selling agency commission paid to G and Co. for the assessment years 1951-52 and 1952-53, and this was upheld by the Appellate Assistant Commissioner and the Appellate Tribunal. The Income-tax Officer then reopened the assessments for the earlier years under Section 34(1)(a) of the Indian Income-tax Act, 1922. On this finding, the Income-tax Officer disallowed deduction of selling agency commission paid to G and Co. for the assessment years 1951-52 and 1952-53, and this was upheld by the Appellate Assistant Commissioner and the Appellate Tribunal. The Income-tax Officer then reopened the assessments for the earlier years under Section 34(1)(a) of the Indian Income-tax Act, 1922. It was under these circumstances that the Delhi High Court held that the Income-tax Officer, in the original assessment proceedings had just accepted the disclosure by the assessee that the commission paid to G and Co. was towards the services rendered as sole selling agents and that this material fact, which had been ex facie accepted then, was later found to be false. It was also held that enough information was available on the completion of the assessments for the years 1951-52 and 1952-53 and that could form the basis for commencing reassessment proceedings for the earlier years and that when the material or primary facts disclosed were themselves false, the provisions of Sec.34(1)(a) were attracted. It has also been held in this decision that a distinction has to be drawn between falsity of the material facts disclosed by the assessee and the erroneous inference which an Income-tax Officer may draw from material facts which are otherwise full and true, and that it is in the latter cases that the courts have come to the view that reassessment may not be permissible as the same would amount to change of opinion. It has also been held in this decision that it is now well settled that under Sec.34(1)(a) all that an assessee was enjoined to do was to make a full and true disclosure of all material and primary facts and once he had done so, it was for the Income-tax Officer to draw his own inferences and conclusions and that once the Income-tax Officer had formed an opinion on the basis of inferences or conclusions drawn from those material facts, he was later precluded from changing that opinion by resorting to reassessment and that there should, however, be something positive to show that there was in fact such formation of opinion at the original assessment stage and that if initially no opinion was formed, the question of change therein could not be said to take place. Under similar circumstances it was held in the case of Basti Sugar Mills Co. Under similar circumstances it was held in the case of Basti Sugar Mills Co. Ltd. V/s. CIT [ 1983 ] 142 ITR 487 (Del) that it was rightly held by the Tribunal that the assessee had failed to disclose truly primary facts necessary for assessment and so reassessment proceedings were valid. Thus, it cannot be doubted that if material facts are not fully and truly disclosed by the assessee, then the Wealth-tax Officer will be justified in taking action under Sec.17(1)(a) of the Act. 18. Mr. K.N. Jain for the assessee has relied on the case of Calcutta Discount Co. Ltd. V/s. ITO [1961] 41 ITR 191 (SC), which is a decision of the Supreme Court, where it has been held that it was the duty of the assessee-company to disclose all the facts which had a bearing on the question; but whether the assessee had the intention to make a business profit as distinguished from the intention to change the form of the investments was really an inference to be drawn by the assessing authority from the material facts taken in conjunction with the surrounding circumstances and that the law did not require the assessee to state the conclusion that could reasonably be drawn from the primary facts. It has also been held in this decision that the question of the assessees intention was an inferential fact and so the assessees omission to state its "true intention behind sale of shares" could not be considered to be a failure or omission to disclose any material facts within the meaning of Sec.34 of the Indian Income-tax Act, 1922, It has also been held in this decision that whether sales by an investment company should in law be treated as trading transactions, and the profits made from the sales as trading profits liable to tax, was a matter which it was the Income-tax Officers task to decide and that no duty lay, on the company to admit that these transactions were by way of trade. It was also held in this decision by the majority that the Income-tax Officer who issued notices under Sec.34 did not have any material before him for believing that there had been any material non-disclosure by reason of which an underassessment had taken place and that the Income-tax Officer had no jurisdiction to issue the notices after the expiry of four years from the end of the assessment years. It has also been held in this decision that once all the primary facts were before the assessing authority, it was for him to decide what inferences of facts could be reasonably drawn and what legal inferences had ultimately to be drawn and it was not for the assessee to tell the assessing authority what inferences, whether of facts or law, should be drawn. 19. Mr. K.N. Jain for the assessee has also relied on the case of ITO V/s. Mad-nani Engineering Works Ltd. [1979] 118 ITR 1 which is a decision of the Supreme Court. In this decision, it has been held that the respondent had produced in the original assessment proceedings all the hundies on the strength of which it had obtained loans from the creditors as also entries in the books of account showing payments of interest and it was for the Income-tax Officer to investigate and determine whether these documents were genuine or not; the respondent could not be said to have failed to make a true and full disclosure of the material facts by not confessing before the Income-tax Officer that the hundies and the entries in the books of account produced by it were bogus and under such circumstances it was held that the reassessment under Sec.147(a) of the Income-tax Act, 1961, was void. Thus, it is evident that if the material facts have been disclosed to the Income-tax Officer or the Wealth-tax Officer, then it is for these officers to draw inferences or conclusions from the facts placed before them on questions of fact and law and it, is not the duty of the assessee to tell them what legal inferences have to be drawn. 20. 20. It has been held in the case of CIT V/s. Kallu Babu Lalchand [1969] 73 ITR 138 by the Calcutta High Court that even though there might not have been a disclosure by the assessee of the income in his return, inasmuch as the asses-see was contending at the time of original assessments that Rs remuneration was not the income of the assessee, all the primary facts relating to that income were known to the Income-tax Officer and these facts were in his possession either by disclosure by the assessee or by his own discovery and so there was no omission or failure on the part of the assessee to disclose in terms of Sec.34(1)(a) of the Indian Income-tax Act, 1922. 21. It has been held in the case of Dunlop Rubber Company Ltd. (London) V/s. ITO [1971] 79 ITR 349 (Cal) that the Income-tax Officer cannot fall back on Section 34(1) to make good his deficiencies in the first completed assessment and that cases sought to be brought within Sec.34(1)(a) of the Indian Income-tax Act, 1922, should strictly fall within that provision and it is for the Department to show that the necessary conditions for exercise of jurisdiction are fully present. It has also been held in this decision that the duty cast upon the assessee to make a full and true disclosure of all material facts does not absolve the Income-tax Officer from performing his duty to apply his mind and make diligent enquiry, specially when the primary facts were before him on the basis of which he might have pursued the enquiry and found out other relevant facts. It has also been held in this decision that there cannot be an omission to disclose what the Income-tax Officer already knows, although it might not have been put in the return of the assessee and it was held that there has been no omission or failure on the part of the petitioner-company to disclose facts so as to justify action under Sections 147 and 148 of the Act. 22. Mr. K. N. Jain for the assessee has relied on the case of Gemini Leather Stores V/s. ITO [1975] 100 ITR 1 which is a decision of the Supreme Court. 22. Mr. K. N. Jain for the assessee has relied on the case of Gemini Leather Stores V/s. ITO [1975] 100 ITR 1 which is a decision of the Supreme Court. In this decision, in the proceedings for the original assessment of the appellant firm, though the appellant did not disclose certain transactions evidenced by certain drafts, the officer himself discovered the facts relating thereto but by oversight did not bring the amounts represented by the drafts to tax as the income of the appellant. Subsequently, the Income-tax Officer issued a notice under Sec.147(a) of the Income-tax Act, 1961, with a view to assess the amounts as the appellants income from undisclosed sources. It was under these circumstances that their Lordships of the Supreme Court held that after discovery of the primary facts relating to the transactions evidenced by the drafts, it was for the officer to make the necessary enquiries and draw proper inferences as to whether the amounts represented by the drafts could be treated as part of the total income of the appellant and this the officer did not do. It was also held that it was clearly a case of oversight and it could not be said that the income chargeable to tax had escaped assessment by reason of the omission or failure on the part of the appellant to disclose fully and truly all material facts, and so he could not, thereafter, take recourse to Sec.147(a) of the Income-tax Act, 1961, to remedy an error resulting from his oversight. 23. I have already pointed out above that during the first reassessment, vide annexure B in Taxation Case No. 52 of 1974, the Income-tax Officer was aware that the assessee had made disclosures of a cash amount of Rs. 15,17,000, shares of Bank of Bihar Limited worth Rs. 3,000 and the Premium Prize Bonds worth Rs. 9,80,000. The Wealth-tax Officer, in spite of knowing full details, assessed only the cash amount of Rs. 15,17,000 and the shares of Bank of Bihar Limited at face value of Rs. 3,000 and he did not include the Premium Prize Bonds of Rs. 9,80,000 and so for (including) the Premium Prize Bonds of Rs. 9,80,000, he initiated the second reassessment proceeding and included this amount by the second reassessment order dated August 31, 1970, vide annexure C in Taxation Case No. 52 of 1974. 3,000 and he did not include the Premium Prize Bonds of Rs. 9,80,000 and so for (including) the Premium Prize Bonds of Rs. 9,80,000, he initiated the second reassessment proceeding and included this amount by the second reassessment order dated August 31, 1970, vide annexure C in Taxation Case No. 52 of 1974. Thus, during the first reassessment proceeding, the Income-tax Officer had knowledge that the Premium Prize Bonds of Rs. 9,80,000 had been shown by the assessee in the disclosure petition dated May 31, 1965. 24. From the aforesaid decisions, it is evident that when the Income-tax Officer knew about the Premium Prize Bonds of Rs. 9,80,000 at the time of first reassessment proceedings, he could have taken action under Sec.17(1)(a) of the Act. It also cannot be doubted that assessment includes reassessment. This will be evident from Sec.2(ca) of the Act. Under such circumstances, the Wealth-tax Officer could not be justified in initiating proceedings under Sec.17(1)(a) of the Act for the second reassessment. It also cannot be doubted that the Wealth-tax Officer while including the amount of Rs. 9,80,000 relating to Premium Prize Bonds in the second reassessment, clearly mentioned that the assessee had not shown the value of the Premium Prize Bonds amounting to Rs. 9,80,000 in the return filed in respect of the original assessment. The Wealth-tax Officer made this statement knowing full well that in the first reassessment he had mentioned about the Premium Prize Bonds of Rs. 9,80,000. It was due to this, that Mr. B.P. Rajgarhia for the Revenue laid stress that every reassessment has to be made on the basis of the original assessment and where in the original assessment the amount was not shown, the Wealth-tax Officer was justified in making the second reassessment. This contention of Mr. B.P. Rajgarhia cannot be accepted, as assessment includes reassessment and so the first reassessment has also to be taken into consideration for the purpose whether the Wealth-tax Officer had knowledge about the amount of Rs. 9,80,000 relating to the Premium Prize Bonds. This contention of Mr. B.P. Rajgarhia cannot be accepted, as assessment includes reassessment and so the first reassessment has also to be taken into consideration for the purpose whether the Wealth-tax Officer had knowledge about the amount of Rs. 9,80,000 relating to the Premium Prize Bonds. When in the first reassessment this amount of Premium Prize Bonds was known to the Wealth-tax Officer, he could not be justified in taking action under Sec.17(1)(a) of the Act for a reassessment for the second time and so it has to be held that the second reassessment proceeding under Sec.17(1)(a) was not validly initiated and so the Tribunal was justified in holding that the conditions precedent for invoking Section 17(1)(a) of the Act were not satisfied and so the second reassessment order passed by the Wealth-tax Officer was bad in law. 25. Feeling this difficulty, Mr. B.P. Rajgarhia submitted that in this case the notice for second reassessment was issued on October 13, 1969, and was served on the same date, and the due date to file the return was within 35 days of the receipt of the notice, i.e., on or before November 17, 1969. This will be evident from annexure A in Taxation Case No. 83 of 1974. Mr. B.P. Rajgarhia has also submitted that annexure A in Taxation Case No. 52 of 1974 clearly shows that the original assessment was completed on October 28, 1965, relating to assessment year 1965-66. He has, therefore, submitted that the second reassessment could be done under Sec.17(1)(b) of the Act. Under Section 17(1)(b) of the Act, the notice could be served within four years from the end of the assessment year 1965-66 and so it has to be held that the second reassessment under Sec.17(1)(b) of the Act could have ordinarily been made by the Wealth-tax Officer. For this purpose Mr. B.P. Rajgarhia has relied on some decisions. 26. Mr. B.P. Rajgarhia for the Revenue, has relied on the case of Smt. Nir-mala Birla V/s. WTO [1976] 105 ITR 483 which is a Full Bench decision of the Calcutta High Court. In this decision, it has been held that the notice that was issued for reassessment was a notice under Sec.14(2) of the Act and that Sec.17 provides the machinery for the issue of that notice and that the notice need not specify under which clause of Sec.14(2) the notice has been issued. In this decision, it has been held that the notice that was issued for reassessment was a notice under Sec.14(2) of the Act and that Sec.17 provides the machinery for the issue of that notice and that the notice need not specify under which clause of Sec.14(2) the notice has been issued. In this decision a reference was made to Mriganka Mohan Sur V/s. CIT [1974] 95 ITR 503 (Cal), which is a decision of the Calcutta High Court where it has been held that where a reassessment under Sec.34(1)(a) of the Indian Income-tax Act, 1922, is set aside by the Appellate Tribunal, it is open to the Tribunal to treat the reassessment as one properly made under Sec.34(1)(b) provided that, on the materials on record, all the necessary conditions under Section 34(1)(b) are satisfied. It has also been held that it is clear that there is no bar to a notice under Clause (a) being treated as a notice under Clause (b) and that if, having launched reassessment proceedings under Clause (a), the officer may proceed under Clause (b), it does not appear to be logical to argue that he cannot form alternative beliefs. It has also been held in this decision that though Clauses (a) and (b) contemplate two separate and mutually exclusive jurisdictions, that does not mean that the same set of facts cannot constitute inference under Clause (a) and information under Clause (b) when they come to the knowledge of the officer which leads him to believe that wealth or income has escaped assessment, and that he may believe that the escapement was due to the omission or failure of the assessee to disclose fully or truly all material facts and he may also believe that even if there was no failure or omission on the part of the assessee, the new facts comprise informa tion in his possession which call for reassessment of escaped wealth. It has also been held that if it is found that some information did come to the knowledge of the officer which was not known to him before and, on the new facts that were brought to light, a belief under either Clause (a) or (b) could be formed, the notice could not be struck down, and assuming that it is doubtful as to whether the case comes under Sec.17(1)(a), the new information will constitute information under Section 17(1)(b) and that no question of limitation was involved and, therefore, the notice of reassessment could not be struck down on the ground that the officer held alternative beliefs. It has also been observed in this decision that it is true that on a mere change of opinion, an assessment cannot be reopened, but there is a distinction between change of opinion unsupported by new information and a change of opinion supported by new information. It was also held in this decision that the instant case was a case of a change of opinion supported by new facts or materials or information hitherto unknown to the officer and if it be ultimately found that a notice could not be supported under Sec.17(1)(a), there could be no doubt that it would be a valid notice under Sec.17(1)(b) of the Act, Thus, from this decision, it is evident that unless new facts are brought to the notice of the Wealth-tax Officer, he cannot take action under Sec.17(1)(b) of the Act. 27. Mr. B.P. Rajgarhia has also relied on another Full Bench decision of the Andhra Pradesh High Court in the case of CWT V/s. Subakaran Ganga Bhishan [1980] 121 ITR 69 (AP) [FB] where it has been held that once the assessment is validly reopened under Sec.17(1) of the Act, no distinction can be made between the items falling under Clause (a) and those falling under Clause (b) and the assessing authority would consequently have jurisdiction to assess the items falling under both the sub-clauses of Sec.17(1) of the Act. In this decision, it was also held at pages 80 and 81 that when once the assessment is validly reopened under Sec.17(1)(a) by issuance of a notice thereunder, the powers of the Wealth-tax Officer are not limited to the items which escaped assessment by reason of the failure or omission on the part of the assessee to file the return in time or to disclose all his net wealth which is subject to tax, but extends to taxing items which were excluded by the Wealth-tax Officer in the original assessment and which would have fallen under Clause (b), in spite of the fact that the period of four years had elapsed. In this decision, an item of immovable property consisting of 8 1/2 acres of open land at Maredpalli, Secun-derabad, was not disclosed by the assessee in the original returns, and so the Wealth-tax Officer reopened in the first instance the assessments for the years 1957-58 and 1958-59 and estimated the value of the property at Rs. 85,000 which was finally determined at Rs. 25,000. The Wealth-tax Officer reopened the assessment for the years 1963-64 to 1967-68 by issuance of notice under Sec.17(1)(a) of the Act on the ground that the assessee had failed to disclose fully and truly all the relevant and material facts relating to the assessments in question. The assessee disclosed the value of the Maredpalli land at Rs. 25,000, but objected to the jurisdiction of the Wealth-tax Officer to reopen the assessment. In the returns filed for the assessment years 1968-69 and 1969-70, the assessee himself assessed the value of the Maredpalli land at Rs. 85,000 on the basis of the approved valuers report and so the value was determined on that basis for varying amounts for the assessment years 1963-64, 1964-65, 1965-66, 1966-67 and 1967-68. The Wealth-tax Officer also noticed that another property known as Begumpet properly, the value of which was declared by the assesses for the assessment year 1968-69 at Rs. 3,83,801 on the basis of the report of an approved valuer and, therefore, came to the conclusion that there was underassessment in respect of the value of the property which was declared by the assessee at Rs, 1,60,000 in the original returns and, accordingly, fixed the value of the property for the assessment years 1963-64, 1964-65, 1966-67 and 1967-68. It was under these circumstances that these observations were made. It was under these circumstances that these observations were made. Thus, it is evident that in these cases the Wealth-tax Officer had no information from before and so this decision will not be helpful to the assessee. 28. Mr. B.P. Rajgarhia, for the Revenue, has also relied on the case of Salem Provident Fund Society Ltd. V/s. CIT [ 1961 ] 42 ITR 547 which is a decision of the Madras High Court. In this decision, the first actuarial report of the assessee company, which carried on life insurance business, covered the period May 24, 1935 to March 14, 1941, and disclosed a small surplus. On the basis of that report, the Income-tax Officer arrived at a profit of Rs. 1,238 each year for the accounting years 1942 to 1944, which was computed in accordance with rule 2(b) of the Schedule to the Income-tax Act. The second actuarial report which related to the inter-valuation period March 14, 1941 to December 31, 1945, disclosed a deficiency of Rs. 86,708 and on the basis of the second report, a sum of Rs. 18,096 was computed under Rule 2(b) as the deficiency for the accounting year 1945. The deficiency disclosed by the third report at the end of 1946 was Rs. 77,165 and for the assessment of the accounting year 1946, instead of deducting Rs. 77,165 from Rs. 90,851 which would have resulted in a surplus of Rs. 13,686, the Income-tax Officer by mistake added the two amounts and arrived at a deficiency of Rs. 1,68,016. A similar mistake was committed for the year 1947 also. Instead of deducting the deficiency disclosed by the actuarial report of Rs. 32,124 at the end of 1947 from the sum of Rs. 77,165 and arriving at a surplus of Rs. 44,951 for 1947, the Income-tax Officer added the figures and computed the deficiency at Rs. 1,09,379. Subsequently, when the Income-tax Officer discovered the mistake, he proposed rectifying the mistake under Section 35 but later initiated reassessment proceedings under Sec.34. It was under these circumstances that it was held that the reassessment proceedings were valid and that "information" for the purpose of Sec.34 need not be wholly extraneous to the records of the original assessment, and a mistake apparent on the face of the order of assessment would itself constitute "information". It was under these circumstances that it was held that the reassessment proceedings were valid and that "information" for the purpose of Sec.34 need not be wholly extraneous to the records of the original assessment, and a mistake apparent on the face of the order of assessment would itself constitute "information". Whether someone else gave that information to the Income-tax Officer or whether he informed himself was immaterial. It was also held that the availability of the powers vested in the Income-tax Officer by Sec.35 did not bar recourse to the jurisdiction vested in him by Sec.34. Thus, this was a decision on the facts of that case and it cannot be doubted that if rectification could be made as the mistake was apparent from the record, he could also take recourse to Sec.34 of the Act. 29. However, in the case before us, the Wealth-tax Officer knew that the Premium Prize Bonds of Rs. 9,80,000 were there and in spite of it he did not include this amount, in the first reassessment and so it cannot be said that this amount of Rs. 9,80,000 was not known to the Wealth-tax Officer at the first reassessment and that he came to know about it subsequently. It was for the Wealth-tax Officer to find out in the first reassessment whether the amount was legally assessable or not and if he did not assess the amount at that time, he could not take reassessment proceeding for the second reassessment. 30. Mr. B.P. Rajgarhia submitted that in the first reassessment, the amount of Premium Prize Bonds of Rs. 9,80,000 was not included due to oversight, inadvertence or mistake committed by the Wealth-tax Officer. He has also submitted that from the statement of facts as given by the Commissioner at page 9 and from the application under Sec.27(3) of the Act filed before the court at page 13, it is evident that the Wealth-tax Officer by mistake did not include the Premium Prize Bonds worth Rs. 9,80,000 and when the omission on the part of the Wealth-tax Officer to include this asset was pointed out by the Appellate Assistant Commissioner in the foot-note of the appellate order, the Commissioner of Income-tax instructed the Wealth-tax Officer to reopen the assessment for the said assessment year, and the second reassessment was, accordingly, completed by the Wealth-tax Officer by including Premium Prize Bonds worth Rs. 9,80,000. 9,80,000. As regards the allegation in the statement of facts and the application before this court by the Revenue, I find no material in the order of the Appellate Assistant Commissioner to that effect. No mention about it has been made by the Appellate Tribunal. Even the Wealth-tax Officer has not made any such assertion in the second reassessment order. Thus it appears that this plea has been taken for the first time in the statement of facts at page 9 by the Commissioner of Wealth-tax and in the application before this court at page 13. The lower authorities have not applied their minds to these assertions which were never made at any stage up to the Tribunal. The facts require investigation and so these new facts cannot be allowed to be agitated at this stage. Then the only question which remains to be considered is whether there can be a second reassessment due to oversight, inadvertence or mistake committed by the Wealth-tax Officer in the first reassessment when the amount of Premium Prize Bonds of Rs. 9,80,000 was known to the Wealth-tax Officer at the time of first reassessment and whether on the same materials which were available at the time of first reassessment, the second reassessment could be validty made. Mr. B.P. Rajgarhia has relied on the case of Kalyanji Mavji and Co. V/s. CIT [1976] 102 ITR 287 (SC) where it has been held that the word "information" in Sec.34(1)(b) of the Indian Income-tax Act, 1922, is of the widest amplitude and comprehends a variety of factors and that, nevertheless, the power under Sec.34(1)(b), however wide it may be, is not plenary because the discretion of the Income-tax Officer is controlled by the words "reason to believe", and that the information may come from external sources or even from the materials already on the record or may be derived from the discovery of new and important matter or fresh facts. It has also been held in this decision that Sec.34(1)(b) would apply to the following categories of cases : (1) Where the information is as to the true and correct state of the law derived from relevantjudicial decisions; (2) Where in the original assessment, the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income-tax Officer; (3) Where the information is derived from an external source of any kind : such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of original assessment; and (4) Where the information may be obtained even from the record of the original assessment from an invesigation of the materials on the record or the facts disclosed thereby or from other enquiry or research into facts or law. 31. It has also been laid down in this decision that where, however, the Income-tax Officer, gets no subsequent information, but merely proceeds to reopen the original assessment without any fresh facts or materials or without any enquiry into the materials which form part of the original assessment, Sec.34(1)(b) would have no application. Thus, it is evident that if the Income-tax Officer merely proceeds to reopen the original assessment without any fresh facts or materials, Sec.34(1)(b) would have no application. At page 300 of this decision, reference has been made to the decision of the Bombay High Court in the case of CIT V/s. H. Hoick Larsen [ 1972 ] 85 ITR 467 where it was observed as follows (p. 479) : "What is obligatory in order to apply Sec.34(1)(b) is that he must have information in his possession in consequence of which he has reason to believe that income has escaped assessment or is under-assessed, etc. The distinction really consists in a change of opinion, unsupported by subsequent information on the one hand and a change of opinion based on information subsequently obtained, on the other. In the former class of cases, the assessment proceedings are attempted to be re-opened without the discovery of an error and without receiving any information as to fact or law...... Such a reopening is based on a mere change of opinion and is without jurisdiction ........ In the former class of cases, the assessment proceedings are attempted to be re-opened without the discovery of an error and without receiving any information as to fact or law...... Such a reopening is based on a mere change of opinion and is without jurisdiction ........ In the latter class of cases, the reopening is based on information leading to the requisite belief and is, therefore, within the jurisdiction of the officer." 32. Relying on this decision, their Lordships of the Supreme Court held that this decision is really based on the question whether it is open to the Income-tax Officer to change his opinion subsequently on the same materials and reopen the original assessment. Their Lordships also observed that they were no doubt inclined to agree with the view expressed by Chandrachud J. in the aforesaid case, but as this question is not free from difficulty and as there is some divergence of judicial opinion on the subject, they would refrain from giving any definite decision on this point, particularly when in the view they took in the instant case, this point does not really arise for determination in this case which is really based on another principle, namely, that the information was derived by the Income-tax Officer from fresh facts. Thus their Lordships of the Supreme Court themselves refrained to express any opinion whether on the same materials, the Income-tax Officer was competent to reopen the original assessment. 33. Mr. B.P. Rajgarhia has also relied on the case of CWT V/s. Smt. Arandhati Balkrishna Trust [1977] 108 ITR 78 which is a decision of the Gujarat High Court. In this decision, reliance was placed on the decision in Kalyanji Mavji and Co. V/s. CIT [ 1976] 102 ITR 287 (SC) and it was held that the word "information" in Sec.17(1)(b) of the Act is of the widest amplitude and comprehends a variety of factors and that the "information" may come from external sources or even from the materials already on record. It was also observed that it may consist of oversight or inadvertent mistake committed by the Wealth-tax Officer or he may discover an error apparent on the face of the record from further enquiry or research into facts or law. In this decision, the assessee was a trust. It was also observed that it may consist of oversight or inadvertent mistake committed by the Wealth-tax Officer or he may discover an error apparent on the face of the record from further enquiry or research into facts or law. In this decision, the assessee was a trust. The Wealth-tax Officer assessed the beneficiary under the trust deed on the total net wealth of the trust for the assessment year 1960-61. The succeeding Wealth-tax Officer examined the trust deed and found that the beneficiary had a right only up to a maximum of 50 per cent of the corpus. He, therefore, issued a notice under Sec.17(1)(b) of the Act on the assessee and on these facts it was held by the Gujarat High Court that there was nothing in the order of the preceding Wealth-tax Officer to show that he had applied his mind to the relevant clauses in the trust deed or that he was aware of the extent of the beneficiarys right in the corpus and that it was a case of an error apparent on the face of the record which would constitute "information", and so it was held that reassessment proceedings under Sec.17(1)(b) were, therefore, valid. The decision of the Supreme Court in Kalyanji Mavji and Co. V/s. CIT [ 1976] 102 ITR 287 (SC) is by two judges of the Supreme Court. 34 Mr. K.N. Jain for the assessee relied on the case of Indian and Eastern Newspaper Society V/s. CIT [1979] 119 ITR 996 which is a decision of three judges of the Supreme Court where it was held that the proposition, in the decision of the Supreme Court in the case of Kalyanji Mavji and Co. 34 Mr. K.N. Jain for the assessee relied on the case of Indian and Eastern Newspaper Society V/s. CIT [1979] 119 ITR 996 which is a decision of three judges of the Supreme Court where it was held that the proposition, in the decision of the Supreme Court in the case of Kalyanji Mavji and Co. [1976] 102 ITR 287 (SC) to the effect that a case where income had escaped assessment due to "oversight, inadvertence or mistake" of the Income-tax Officer must fall within Section 34(1)(b) of the Indian Income-tax Act, 1922, is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on re-appraising the material considered by him during the original assessment, the Income-tax Officer discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessment and that an error discovered on a reconsideration of the same material (and no more) does not give him that power. Thus, in view of the decision of the larger Bench of the Supreme Court, when the Wealth-tax Officer knew at the first reassessment about the Premium Prize Bonds of Rs. 9,80,000 and did not include it in the first reassessment proceeding, he was not competent to initiate a second reassessment proceeding for including this amount of Rs. 9,80,000 which amount is specifically mentioned in the first reassessment proceeding. Thus, this decision of a larger Bench of the Supreme Court supports the view taken by the Tribunal that there can be no second reassessment under Sec.17 of the Act. 35. In the case of Maharaj Kumar Kamal Singh V/s. CIT [1959] 35 ITR 1 (SC) reassessment proceeding was started on the basis of the decision of the Privy Council and so it was held that the word "information" in Sec.34(1)(b) of the Indian Income-tax Act, 1922, included information as to the true and correct state of the law and so would cover information as to the relevant judicial decisions. It has also been held in this decision that "escape" in Section 34(1)(b) was not confined to the cases where no return had been submitted by the assessee or where income had not been assessed owing to inadvertence or oversight or other lacuna attributable to the assessing authorities; even in a case where a return had been submitted, if the Income-tax Officer had erroneously failed to tax a part of the assessable income, it was a case where that part of the income had escaped assessment. It was also held in this decision that the decision of the Privy Council was "information" within the meaning of Sec.34(1)(b) and that their decision justified the belief of the Income-tax Officer that the part of the appellants income had escaped assessment for the relevant year. It has also been held in this decision that two conditions must be satisfied before the Income-tax Officer can act under Sec.34(1)(b); (1) he must have information which comes into his possession subsequent to the making of the original assessment order; and (2) that information must lead to his belief that the income chargeable to tax has escaped assessment, or has been under-assessed or assessed at too low a rate or has been made the subject of excessive relief. The observations have been overruled in the decision of the Supreme Court in Indian and Eastern Newspaper Society V/s. CIT [1979] 119 ITR 996, as I have mentioned above. Thus, it is evident that the Wealth-tax Officer knew full well about the Premium Prize Bonds of Rs. 9,80,000 which he mentioned in the first reassessment proceeding and so he was not justified in initiating the second reassessment proceeding and making second reassessment for this amount of Rs. 9,80,000. 36. Mr. Thus, it is evident that the Wealth-tax Officer knew full well about the Premium Prize Bonds of Rs. 9,80,000 which he mentioned in the first reassessment proceeding and so he was not justified in initiating the second reassessment proceeding and making second reassessment for this amount of Rs. 9,80,000. 36. Mr. K.N. Jain, for the assessee, has relied on the case of Johri Lal (HUF) V/s. CIT [1973] 88 ITR 439 which is a decision of the Supreme Court, where it has been held that where the Income-tax Officer himself proceeds on the basis of Sec.34(1)(b) of the Indian Income-tax Act, 1922, and not on the basis of Sec.34(1)(a), in the absence of material on record to show that the Income-tax Officer had formed the requisite belief, recorded his reasons for taking action under Sec.34(1)(a) and obtained the sanction of the Central Board or the Commissioner, as the case may be, it is not open to the Appellate Tribunal to justify the proceedings taken by the Income-tax Officer under Sec.34(1)(a). It was also held by their Lordships of the Supreme Court that the formation of the required belief by the Income-tax Officer before proceedings can be validly initiated under Sec.34(1)(a) is a condition precedent; the fulfilment of this condition is not a mere formality, it is mandatory, and failure to fulfil that condition would vitiate the entire proceedings. It was held that the formation of the required belief is not the only requirement; the officer is further required to record his reasons for taking action under Sec.34(1)(a) and obtain the sanction of the Central Board or the Commissioner, as the case may be. In the present case, under Sec.17 of the Act, no sanction of the Commissioner is needed. Moreover, the decisions are that if the proceedings under Sec.34(1)(a) are initiated, then the proceeding under Sec.34(1)(b) can be initiated if the facts justify the assessment. 37. Another point which has to be considered in this case before us is that before the Tribunal the learned departmental representative stated that the case was not reopened under Sec.17(1)(b) but the reopening for the second reassessment was under Sec.17fl)(a) of the Act. Second reassessment order is annexure A in Taxation Case No. 263 of 1976, and it clearly mentions that the assessee had not shown the value of the Premium Prize Bonds amounting to Rs. Second reassessment order is annexure A in Taxation Case No. 263 of 1976, and it clearly mentions that the assessee had not shown the value of the Premium Prize Bonds amounting to Rs. 9,80,000 in the return filed in respect of the original assessment. This clearly shows that second reassessment proceeding was initiated only under Section 17(1)(a) of the Act. When the learned departmental representative stated before the Tribunal that it was not a case of reopening of second reassessment under Sec.17(1)(b) but a case of reopening under Sec.17(1)(a) of the Act, the Department conceded before the Tribunal that the Tribunal was only to consider whether second reassessment under Sec.17(1)(a) was possible and the Tribunal held on the facts that second reassessment or reopening under Sec.17(1)(a) was bad in law. 38. It has been held in the case of CIT V/s. Scindia Steam Navigation Co, Ltd. [1961] 42 ITR 589 by their Lordships of the Supreme Court that when a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it. Before the Tribunal the only argument was that the assessee had not fully and truly disclosed the material and primary facts relating to Rs. 9,80,000 and so assessment was reopened under Sec.17(1)(a) of the Act. Under such circumstances, the Tribunal decided the question relating to the validity of the second reassessment under Sec.17(1)(a) and, in view of the concession by the learned departmental representative, did not consider the applicability of Sec.17(1)(b) and so this court is not competent to consider the validity of Sec.17(1)(b) of the Act. The view expressed by the Supreme Court was followed by the Allahabad High Court in the case of CIT V/s. Shiv Nath Prasad [ 1970] 77 ITR 378 (All) where it was held that it is only a question that has been raised before or decided by the Tribunal that could be said to arise out of its order and be referred to the High Court. It was also pointed out that it was conceded on behalf of the Department before the Tribunal that the amount of sales tax when collected by a dealer did not become his income liable to tax immediately on the receipt thereof and became his taxable income only when the dealer did not make payment thereof to the Government in the relevant accounting year, and it was, therefore, held that the question as to whether or not the amount of sales tax when received by the assessee was liable to tax was never agitated before the Tribunal and cannot be deemed to be a question arising out of its order. 39. It has been held in the case of Lakshmiratan Cotton Mills Co. Ltd. V/s. CIT [1969] 73 ITR 634 (SC) that the High Court has no power to call for a statement of the case on questions which were incorporated neither in the application under Sec. 66(1) nor in the application under Sec. 66(2) and that the power under Sec. 66(4) might be exercised to call for a supplementary statement only when the court is satisfied that the statements in a case referred under Sec. 66(3) and (2) were not sufficient to enable it to determine the question raised by that statement and that Sec. 66(4) did not confer a power to raise any additional questions or to call for a statement of case on questions not referred by the Tribunal. It has also been held in this decision that, the correctness of the order of the High Court calling for a statement of the case could be challenged at the hearing of the reference and the court could decline to answer the question referred pursuant to the direction of the High Court if it did not arise out of the order of the Tribunal or was a question of fact or was academic or could not have been raised because it was not incorporated in the application. 40. 40. In the present case, the reference application filed before the Tribunal was rejected vide annexure-E on the ground that the Tribunal found that the existence of the Premium Prize Bonds was disclosed by the assessee and was known to the Wealth-tax Officer and that the escapement of wealth did not arise out of the non-disclosure on the part of the assessee within the meaning of Section 17(1)(a) of the Act and the Tribunal held that it was a finding of fact and no referable question of law arose therefrom. It appears that this court directed the Tribunal to refer the question whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the second reassessment order passed by the Wealth-tax Officer under Sec.17 of the Act on August 31, 1970, to be bad in law, and the Tribunal in compliance with the direction of this court referred the question. If the Tribunal had been left free to refer the question, then the Tribunal would have clearly mentioned Sec.17(1)(a). It was because of the courts direction that Sec.17was mentioned without reference to Sections 17(1)(a) and 17(1)(b) of the Act. Actually, the Tribunal had decided only the question relating to the validity of the second reassessment under Sec.17(1)(a) and so this court has only to consider the question as raised before the Tribunal and as decided by the Tribunal under Sec.17(1)(a) of the Act. 41. It has been held in the case of CIT V/s. Nathuabhai Desabhai [1981] 130 ITR 238 (MP) that the jurisdiction of the High Court in reference under Sec.256 of the Income-tax Act, 1961, is only advisory and a question of law has to be answered within the ambit of this jurisdiction arid that a departure is allowed within certain permissible limits, inasmuch as an aspect of the same question can be decided by the court even if that aspect is not directly referred to by the Tribunal. It has also been held in this decision that the basic frame of the question cannot be altered nor can the court embark upon the other provisions of the Act to justify the chargeability or otherwise of a particular item of income and that it is imperative that the question itself arises out of the Tribunals order. It has also been held in this decision that the basic frame of the question cannot be altered nor can the court embark upon the other provisions of the Act to justify the chargeability or otherwise of a particular item of income and that it is imperative that the question itself arises out of the Tribunals order. It has also been held that this is possible only if all the necessary facts on which the order is based have been placed before the Tribunal and that if those facts are not present, the Tribunal cannot refer to them and in such a case no question outside the perimeter of the case as presented before the Tribunal can be enquired into. On the facts of that case, it was held that if the Revenues contentions were to be accepted, the High Court would have to enquire into not only the taxability of the receipt but also about the year or years in which various amounts paid in numerous instalments could be chargeable to tax and there was no factual foundation for such an enquiry and, therefore, within the limited jurisdiction of the High Court under Sec.256, the High Court could not make a general enquiry and answer the question in a way different from the one which had been posed and referred to the High Court by the Tribunal. In the present case before us, it was conceded before the Tribunal that it was not a case under Sec.17(1)(b), but it was a case under Section 17(1)(a) and the Tribunal held that the second reassessment under Sec.17(1) (a) was invalid. Under such circumstances, the question of reassessment under Sec.17(1)(b) was not agitated before the Tribunal, and the learned departmental representative, Mr. B.P. Rajgarhia, cannot be allowed to agitate the question of reassessment under Sec.17(1)(b) of the Act. 42. Mr. K.N. Jain, for the assessee, relied on the case of Karnani Properties Ltd. V/s. Off [1971] 82 ITR 547 (SC), where the assessce-company owned the Karnani Mansion consisting of numerous residential flats and over a dozen shops and all these were let out to tenants who made monthly payment which included charges for electric current, for the use of lifts, for the supply of hot and cold water, for the arrangements for scavenging, for providing watch and ward facilities as well as other amenities. It purchased high voltage current in bulk, converted the same into low voltage current in its own power house within the premises and supplied the power to the tenants. It also maintained separate water pump-house and a boiler for the supply of hot and cold water to the tenants. The company provided electric lifts for the benefit of the tenants, and for all these purposes the assessee maintained a large number of permanent staff. The company claimed that the entire receipts from the tenant should be treated as income from business as it had been formed for carrying on the business of letting out flats and shops. The Income-tax Officer rejected the claim but split the receipts into two parts, one part being treated as rent and the other as "income from other-sources" taxable under Sec.12 of the Income-tax Act, 1922. The Appellate Tribunal held that the second part was assessable as income from business under Sec.10. Neither the department nor the assessee contended that that part was assessable under section 9. The High Court held that the both parts of the receipts (sic) was assessable resident (sic). In these circumstances, their Lordships of the Supreme Court held, reversing the decision of the High Court, that the Department having all along proceeded on the basis that the income of the assessee was from two different sources, it should not have been allowed by the High Court to change its case, and that on the facts since the services rendered by the assessee to its tenants were the result of its activities carried on continuously in an organised manner with a set purpose and with a view to earn profits, those activities were business activities, and the income arising therefrom was assessable under Sec.10. It has also been held in this decision that when the question referred to the High Court speaks of "on the facts and in the circumstances of the case", it means in the facts and circumstances found by the Tribunal and not faets and circumstances that may be found by the High Court on a re-appraisal of the evidence and in the absence of a question whether the findings were vitiated for any reason being before the High Court, the High Court has no jurisdiction to go behind or question the statements of fact made by the Tribunal. Thus, it is evident from this decision that once the Department conceded before the Tribunal that it was not a case under Sec.17(1)(b) of the Act, but it was a case under Sec.17(1)(a) of the Act, and the Tribunal proceeded to decide the case on the basis that the second reassessment had been made under Section 17(1)(a), Mr. B.P. Rajgarhia cannot now be allowed to argue in the High Court that the case was covered by Sec.17(1)(b) of the Act and the second reassessment should be held to be valid under Sec.17(1)(b), 43. Moreover, I have already held above in view of the decision in Indian and Eastern Newspaper Society V/s. CIT [1979] 119 ITR 996 (SC), that if the materials were already before the Wealth-tax Officer at the time of first reassessment, then the error discovered on a reconsideration of the same materials, docs not give power to the Wealth-tax Officer to reopen the assessment on the ground that the income had escaped assessment due to oversight, inadvertence or mistake of the Wealth-tax Officer. 44. In view of my discussions above, I hold that the Tribunal was justified in holding that the second reassessment order passed by the Wealth-tax Officer under Sec.17 of the Act on August 31, 1970, was bad in law. Thus, the answer to the question is in the affirmative and in favour of the assessee and against the Revenue. 45. Now let us take up Taxation Case No. 88 of 1974. In this case the assessee, an individual, was originally assessed on October 28, 1965. Subsequently, a notice under Sec.17 was served on the assessee on October 13, 1969, requiring him to file his wealth-tax return by November 17, 1969, within 35 days. The assessee filed the return on February 19, 1970. 46. As there was delay in filing of the return in response to the notice under Sec.17, the Wealth-tax Officer initiated proceedings for levy of penalty under Sec.18(1)(a) of the Act. The penalty order shows that the assessee did not comply with the show cause notice issued by the Wealth-tax Officer and so the Wealth-tax Officer held that the assessee had nothing to urge against the penalty proceedings and so the penalty was leviable. The Wealth-tax Officer accordingly, levied a penalty of Rs. 14,607 for the default from November 18, 1969 to February 18, 1970. The Wealth-tax Officer accordingly, levied a penalty of Rs. 14,607 for the default from November 18, 1969 to February 18, 1970. A copy of the penalty order has been annexed and marked as annexure-A forming part of the statement of the case. The Appellate Assistant Commissioner cancelled the penalty order, holding that the delay was for a reasonable cause. A copy of the order of the Appellate Assistant Commissioner has been annexed and marked as annexure-B forming part of the statement of the case. 47. As regards the assessment year 1965-66, the Tribunal found that the reassessment order passed for this year had since been cancelled. Therefore, there was no assessment left on the basis of which penalty for the year could be levied. The Tribunal, therefore, held that so far as this assessment year was concerned, there was no question of levying any penalty. A copy of the order of the Tribunal has been annexed and marked as annexure-C forming part of the statement of the case, 48. In this case the Tribunal has referred the following question for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law, in upholding the order of the Appellate Assistant Commissioner, by cancelling the penalty of Rs, 14,607 imposed under Section 18(1)(a) of the Wealth-tax Act, 1957?" 49. I have already held in Taxation Case No. 263 of 1976 above, that the second reassessment proceeding was bad in law. Under such circumstances, the order of the Tribunal relating to penalty is also upheld. I, accordingly, hold that the Tribunal was justified in law in upholding the order of the Appellate Assistant Commissioner cancelling the penalty of Rs. 14,607 made under Sec.18(1) (a) of the Act. This question also, is accordingly answered in the affirmative, and in favour of the assessee and against the Department. 50. Now I have to consider Taxation Case No. 52 of 1974. I have already pointed out above that in the second reassessment by annexure-C, the amount of Premium Prize Bonds of Rs. 9,80,000 was added and the wealth-tax liabilities to the extent of Rs. 6,200 were allowed, but the Wealth-tax Officer did not allow the income-tax liabilities shown at Rs. Now I have to consider Taxation Case No. 52 of 1974. I have already pointed out above that in the second reassessment by annexure-C, the amount of Premium Prize Bonds of Rs. 9,80,000 was added and the wealth-tax liabilities to the extent of Rs. 6,200 were allowed, but the Wealth-tax Officer did not allow the income-tax liabilities shown at Rs. 5,88,000 in view of the fact that this amount has not been considered to be deductible as per the Appellate Assistant Commissioners order for this year. The assessee went in appeal before the Appellate Assistant Commissioner and contended that the Wealth-tax Officer was not justified in rejecting the assessees claim for deduction of income-tax out of the total assets amounting to Rs. 5,88,000. The Appellate Assistant Commissioner, for detailed reasons mentioned in his order, came to the conclusion that the income-tax liabilities should be considered as a debt owing by the appellant on the valuation date in question. He, accordingly, directed the Wealth-tax Officer, to allow the tax liability of Rs. 5,88,000 for both the assessment years 1964-65 and 1965-66. A copy of the consolidated order of the Appellate Assistant Commissioner has been annexed and marked as annexurc-"D" forming part of the statement of this case. 51. The Department came in appeal before the Tribunal and the departmental representative urged before the Tribunal that the liability to pay income-tax on the Premium Prize Bonds did not exist on the relevant valuation date, namely November 15, 1963 and November 4, 1964, because the assessee disclosed the existence of, the concealed wealth only by his disclosure petition dated May 31, 1965. The Tribunal disposed of W.T.A. Nos. 71 and 72 (Pat) of 1971-72 for the assessment years 1964-65 and 1965-66. As regards the assessment year 1964-65, the Tribunal held that the Appellate Assistant Commissioner had rightly allowed income-tax payable on the disclosed wealth as a deduction in computation of the assessees wealth. The Tribunal disposed of W.T.A. Nos. 71 and 72 (Pat) of 1971-72 for the assessment years 1964-65 and 1965-66. As regards the assessment year 1964-65, the Tribunal held that the Appellate Assistant Commissioner had rightly allowed income-tax payable on the disclosed wealth as a deduction in computation of the assessees wealth. However, as regards the assessment year 1965-66, the Tribunal has pointed out that it has already passed orders in the assessees appeal against the second reassessment in the assessment year 1965-66 in W.T.A.No. 69 (Pat) of 1971-72, which is annexure-C in Taxation Case No. 263 of 1976, holding that the second reassessment order dated August 31, 1970, for the assessment year 1965-66 was bad in law and so a nullity and in view of the above facts, the Tribunal held that the departmental appeal for the assessment year 1965-66 has become infructuous. The Tribunal also held that as the very assessment has been cancelled, no question of allowance of any deduction in consequence of the said assessment survives and, therefore, the Tribunal dismissed W.T.A. No. 72 (Pat) of 1971-72 for the assessment year 1965-66. This consolidated order of the Tribunal is at pages 8 to 11 of the paper book. The order of the Tribunal in W.T.A. No. 49 (Pat) of 1969-70 relating to the assessment year 1965-66 has been annexed and marked as annexure-E forming part of the statement of the case. 52. On these facts, the following question of law has been referred to this court, as directed by this court, for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in treating the departmental appeal as infructuous, and on that basis, in dismissing the departmental appeal?" 53. The facts have been given in the statement of the case but the Tribunal while stating the case, lost sight of the order relating to the assessment year 1965-66, as mentioned in paragraph 3 of the order of the Tribunal dated September 20, 1972. However, the question referred by the Tribunal can be decided on the materials on record. 54. The facts have been given in the statement of the case but the Tribunal while stating the case, lost sight of the order relating to the assessment year 1965-66, as mentioned in paragraph 3 of the order of the Tribunal dated September 20, 1972. However, the question referred by the Tribunal can be decided on the materials on record. 54. I have already held in Taxation Case No. 263 ot 1976 that the second reassessment under Sec.17(1)(a) of the Act is bad in law and so a nullity, Under such circumstances, the Tribunal was justified in saying that the departmental appeal for the assessment year 1965-66 had become infructuous. I, therefore, hold that the Tribunal was justified in law in treating the departmental appeal as infructuous and on that basis in dismissing the departmental appeal, Accordingly, this question is also answered in favour of the assessee and against the Revenue. However, in view of the circumstances of the case, there will be no order as to costs. Uday Sinha, J. 55 I agree.