R.N. Pyne, J.
1. This appeal is directed against a judgment and order dated January 17, 1973, of T.K. Basu J.  TLR 115 allowing the respondent company's application made under art. 226 of the Constitution challenging the validity of five notices all dated 14th December, 1964, issued under Section 148 of the Income-tax Act, 1965 (hereinafter referred to as 'the Act') in respect of the assessment years 1956-57, 1957-58, 1958-59, 1959-60 and 1961-62. By the aforesaid notices the appellant sought to reopen the respondent's assessments in respect of the aforesaid years.
2. Out of the aforesaid five notices the learned judge of the court of first instance cancelled and rescinded four notices relating to the assessment years 1956-57 to 1959-60 and directed the appellant to forbear from giving effect thereto in any manner whatsoever. The learned judge however upheld the notice for the assessment year 1961-62 and as there is no appeal against that decision it is not necessary for us to refer to the said notice for the assessment year 1961-62.
3. As the learned judge of the court of the first instance in his judgment has set out the relevant facts of this case in detail, to avoid prolixity, it is not necessary to recite the same. It appears that the assessments in respect of the said years were sought to be reopened by the I.T. department on the ground that there was escapement of income from the assessment because of the fact that the assessee's stock-in-trade and work-in-progress were not correctly assessed due to non-disclosure of material facts by the assesses. The department's case and the reasons for reopening of the assessments and issuance of the said notices would appear from the affidavit of one Mohamed Maraikayar affirmed on the 22nd May, 1964, which was used in opposition on behalf of the department in the court of the first instance and the material portion of the recorded reasons which were disclosed pursuant to the court's order and set oat by the said deponent in his another affidavit affirmed on the 1st December, 1972.
4. The reasons given by the said Maraikayar in his original affidavit mentioned above were summarised by the learned judge of the court of first instance in his judgment, as would appear from pages 80-81 of the paper book of the instant appeal, in the following terms :
In the original affidavit in answer to the rule which is affirmed by Mohammad Maraikayar on the 22nd May, 1965, it was stated that from the facts now available it appears that all the items were valued at cost is not correct. It also appears that the company's claim that it valued its finished goods on the basis of the actual cost is also not correct. It appears that the stock-in-trade and work-in-progress were valued by the company very much below the cost, viz., at percentages ranging between 80 and 84%. Whatever may be the position of the manufacturing charges to thetotal cost, the company, according to the deponent, should have valued its closing stock either at cost or at market value, whichever is lower. It is further alleged that the company had changed its method of valuation of stocks without ever drawing the attention of the ITO to this fact. The following significant sentence in para. 4 of the affidavit may be noted : 'Whatever disclosure that was made by the company was a mere description in the balance-sheet and no more.'
5. As the recorded reasons for the respective years were identical except for the amount which according to the said deponent have been under-assessed the learned judge of the court of the first instance quoted in his judgment the relevant portion of the recorded reasons for one particular year, namely, assessment year 1956-57, The recorded reasons read as follows (see  ILR 115):
'The company carries on business in manufacture and sale of paints and resins. In the course of assessment proceedings for 1963-64, it was noticed that the company had valued the closing stock of finished products and work-in-progress at the raw material cost only, without taking into account the proportion of such manufacturing cost as have been expended by it in the manufacturing of finished products or work-in-progress. It was found that the raw material cost of the finished products and work-in-progress worked out to 83% of the full value of the finished products. By such under-valuation of closing stock, the company has under-stated its profits by Rs. 37,163. It should be stated here that in arriving at the under-statement of profits both opening and closing stocks have been revalued at their full cost prices and the difference only has been taken.
The company has not followed either the cost price or cost or market price, whichever is lower ; but a method which has not been recognised in any commercial practice. The under-valuation of closing stock has resulted in under-assessment. The assessment has, therefore, to be reopened under Section 147 of the Act. It should be further stated that in the balance-sheet filed for the various years, the company has stated that the stocks have been valued at 'cost or under' ; but it was only in 1963-64, that the full particulars were obtained and it was noticed that the stocks have not been valued according to the recognised commercial principles.'
6. The learned judge of the court of first instance considering the facts and circumstances of the case and the arguments that were advanced before him on behalf of the parties, for the reasons mentioned in detail in his judgment was of the view that in the instant case with regard to the notices in respect of the four assessment years, i.e., 1956-57 to 1959-60, there was no non-disclosure of material facts for which the ITO concerned was authorised to take action under Section 147(a) of the Act or to issue the saidnotices under Section 148 of the Act. In his judgment, the learned judge observed as follows (see  TLR 115):
'It is further stated that the company has under-valued its stocks which in effect means that this is an omission on the part of the company for which income has escaped assessment.
But the question that has been canvassed before me is not really confined to this aspect of the matter alone. Assuming in favour of the revenue that the assessee-company had under-valued its stock, the undisputed fact remains that in the balance-sheet and the profit and loss account they had shown the valuation of the stock as also indicated the basis of valuation with regard to the respective kinds of stocks. That being so, was there anything standing in the way of the Income-tax Officer, in the respective years of assessment, investigating the question whether the stocks had been properly valued and whether the valuation adopted in respect of those stocks were correct or not It seems to me that the answer must clearly be in the negative. In other words, once the primary facts, namely, the valuation of the different types of stocks and the basis of their valuation were before the Income-tax Officer, it was for the officer concerned to find out whether the correct basis has been adopted or not and whether the value assigned to the stock is correct or not.......In my view, these observations of mine apply with considerable force to the facts of this case. As I have already indicated, the basis of the valuation of the different types of stocks as also their respective values were clearly shown in the balance-sheets which accompanied the returns for all the relevant years. Thereafter, it was the duty of the Income-tax Officer to exercise due care and caution and make the necessary enquiries for the purpose of finding out whether the assessee was following a correct basis of valuation or whether he was, by adopting a method of valuation which is unknown in commercial practice, was seeking to escape its legitimate liability for income-tax. A failure to make such an enquiry or investigation or a mere opinion on the part of another officer that his predecessor in the earlier years had erroneously accepted a wrong basis of valuation does not, in my view, justify reopening of the proceedings under Section 147(1)(a) of the Act, as is now sought to be done. If it was a case of invoking the provisions of Section 147(1)(b) of the Act different consideration might have arisen.'
7. Substantially same arguments as were advanced in the court of the first instance on behalf of the respective parties were advanced before us and, therefore, we do not think it necessary to recite the same in any detail. The main contention of the respondent was that all the materials that were required to be disclosed regarding the valuation of the stock-in-trade and work-in-progress were duly and properly disclosed by the assessee. Further, the said facts would also appear from the relevant balance-sheets of the respondent which were filed by it with the ITO. According to the respondent in the instant case, all the relevant primary facts were disclosed by it at the time of assessment and the reason for reopening of the assessment in the instant case was not any failure or omission on the part of the respondent to disclose fully and truly the primary facts necessary for the assessment but was merely a change of opinion of the subsequent ITO on the question of valuation. It was further submitted that the method of valuation adopted by the respondent for valuing its stock-in-trade and work-in-progress has been approved and upheld by this court in its decision in the case of British Paints India Ltd. v. CIT : 111ITR53(Cal) , Therefore, according to the respondent, there could not be any question of non-disclosure of material facts in the instant case.
8. On behalf of the revenue, it was mainly contended that the mere filing of the balance-sheets would not suffice but it was the duty of the assessee to point out to the officer making the assessment the relevant items of the balance-sheet as also to indicate the correct mode of valuation and inasmuch as, in the instant case, there were omissions or failure on the part of the assessee in that behalf the ITO had jurisdiction to reopen the assessment of the respondent. It was further submitted that in cases where exemption is claimed it would be the primary duty of the assessee to satisfy the ITO concerned that the proper rule had been applied. In support of the above, the department's counsel referred to and relied upon the case of Kantamani Venkatanarayana and Sons v. First Addl. ITO : 63ITR638(SC) , ITO v. Lakhmani Mewal Das : 103ITR437(SC) and CIT v. Ramkrishna Deo : 35ITR312(SC) .
9. The principle of law applicable to the question of reopening of the assessment under Section 147 of the Act, in our view, being well settled by a catena of decisions of the Supreme Court and various High Courts it is not necessary for us to enter into any discussion regarding the same. The question in the instant case is one of application of the well established principles to the facts and circumstances of the case. Reading the recorded reasons and the case made out in the affidavits filed on behalf of the department mentioned earlier it appears to us that in the instant case all the relevant primary facts necessary for the valuation of the assessee's stock-in-trade and work-in-progress were disclosed by the assessee to the ITO making the assessment. It was the duty of the concerned ITO to find out, when all the primary facts were disclosed by the assessee and were before him as to what was the correct principles of valuation to be adopted in the instant case. It is not disputed by the department that the method adopted by the assessee is one of the recognised methods of valuation. But what is being disputed is that the assessee did not indicate to the officer making the assessment the correct method of valuation applicable to thefacts of this case and it was the duty of the assessee to satisfy the ITO that the method of valuation adopted by the assessee was the correct method. We are unable to accept this contention of the department. If all the material facts relevant on the question of valuation were disclosed by the assessee and the method of valuation adopted by the assessee could not be disputed as one of the recognised methods of valuation then it was the duty of the ITO who made the assessment to satisfy himself in the background of the primary facts disclosed by the assessee whether that method was the correct method applicable in the instant case. In the instant case it appeals to us that all the primary facts material for the purpose of assessment were disclosed by the assessee and on those facts the ITO who made the assessment was satisfied that the method of valuation adopted by the assessee was the correct method. But on those facts subsequently different view was taken to the effect that the method of valuation adopted by the assessee was not the correct method. This merely amounts to a change of opinion. In the above view of the matter it cannot be said that there was any nondisclosure of material facts by the assessee in the instant case. It is well settled that when all the primary facts relevant for the purpose of assessment are disclosed by the assessee then a subsequent change of opinion on these facts would not confer jurisdiction upon the ITO to reopen the assessment. We respectfully agree with the decision of the learned judge of the court of first instance and fully confirm his reasonings and conclusions as recorded in the judgment appealed against. In our view the learned judge of the court of first instance came to a correct conclusion and, therefore, his judgment and order should be upheld. This appeal is, therefore, dismissed but there shall be no order as to costs.
10. I agree.