Qur'an 2:42 Says
And do not mix the truth with falsehood or conceal the truth while you know [it].
For the proper understanding of this verse we need to recall that in the time of the Prophet the Jews of Arabia were more learned than the Arabs. In fact, there were some Jewish scholars of Arabia whose fame had spread even beyond the confines of that land. It was natural in such circumstances that, when the Prophet began to preach his message, the ignorant Arabs should approach the Jews and ask their opinion of the Prophet and his teachings, particularly as the Jews also believed in Prophets and Scriptures. We find that this inquiry was often made by the Makkans, and continued to he addressed to the Jews after the Prophet arrived in Madina.In reply to this query, however, the Jewish religious scholars never told the candid truth. It was impossible for them to say that the doctrine of monotheism preached by Muhammad was incorrect, that there was any error in his teachings regarding the Prophets, the Divine Scriptures, the angels and the Next Life and that there was any error in the principles of moral conduct which the Prophet propounded. At the same time, however, they were not prepared to make a straightforward affirmation of the truth of his teachings. In short, they neither categorically denied the Truth nor were prepared to accept it with open hearts.Instead, they tried to plant insidious doubts in the minds of everybody who enquired about the Prophet and his mission.
It is this attitude of the Jews to which the Qur'an alludes when it asks them not to overlay the truth with falsehood.