JUDGMENT KOTVAL J.-We are concerned in this reference with a notice issued under section 34 (l)(b) of the Indian Income-tax Act whereby the Department sought to bring to tax an amount of Rs 5,10,788 paid as interest in the assessment year 1947-48. The. circumstances in which the notice came to be issued may be briefly stated as follows:- 2. The assessee is a partnership consisting of four partners (the four Daga brothers) who were referred to in the arguments before us as the Kamptee firm. They had also admitted to the benefit of the partnership three minor members of their family. This firm was known as "R. B. Bansilal Abirchand. Firm, Kamptee." We shall reference to it hereafter as the assessee or the "Kamptee firm". There was also another firm known as the "Bisesar House" Firm in which the four Daga Brothers, the major partners of the Kamptee Firm were partners along with a fifth partner the late Sir Manekji Dadabhoy who owned an eight annas share while the Daga Brothers owned the remaining eight annas share. 3. The assessee made a return of income. tax for the assessment year 1947-48 wherein they showed a total net loss of business of Rs. 1,09,311. This figure was worked out after showing certain receipts and payments on account of interest. The total receipts of interest shown were Rs. 4,87,129 from which were deducted certain payments on account of interest to the extent of Rs 22,398 leaving a net income from interest of Rs. 4,64.731. Adjusting this income against the profit and loss account statement of that year the assessee showed a net loss of Rs. 1,09.311 as stated above. In the return the assessee-firm had undoubtedly shown the amount of Rs. 5,10,788 paid as interest by the Bisesar House Firm but it appears that they had excluded it from assessment upon certain grounds. The Income-tax Officer accepted the return and excluded the amount of Rs. 5,10,788 from the tax. 4. In the meanwhile, proceedings for the assessment of the Bisesar House Firm had been taken and the Bisesar House Firm had claimed that this amount of Rs. 5,10,788 should be legitimately allowed to them in the assessment for the year 1947-48. The Income-tax Officer accepted the return and excluded the amount of Rs. 5,10,788 from the tax. 4. In the meanwhile, proceedings for the assessment of the Bisesar House Firm had been taken and the Bisesar House Firm had claimed that this amount of Rs. 5,10,788 should be legitimately allowed to them in the assessment for the year 1947-48. The Income-tax Officer had disallowed it on the ground that the self-same partners of the Kamptee Firm were 6180 the partners in the Bise Bar House firm and therefore whatever advances the K mptee firm had made to the Bisesar House firm were advocates from the partners in the Biseaar House firm itself and so could not be allowed to the firm as legitimate elpenses of business. This view of the Income-tax Officer ultimate came to be challenged before the Income-tax Appellate Tribunal, Bombay Bench, and by an order p&88ed on 23-2-1950 the Tribunal reversed the decision of the Income-tax Officer. The Tribunal held that the constitution of the Kamptee Firm was quite different from that of the Bisesar House Firm and that the advances to the Bisesar House Firm were made by the Kamptee firm as such and not by the several partners of the Kamptee firm who also happened to be partners in the assessee firm. They also found that the advances brought into the Bise8ar House firm were not credited to the accounts of the individual partners of the Kamptee firm but were credited to the account of the Kamptee firm itself. Therefore, the Tribunal held that the Income-tax Authorities were wrong in disallowing Rs. 5,10,788 in the assessment of the Bisesar House Firm for the assessment year 1947-48. 6. It may be noticed here that the very finding given in the assessment of the Bisesar House firm by the Tribunal to which we have just referred showed that the Kamptee Firm itself received the amount of Re. 5,10,788 and that the amount was not paid to its partners. Totality extent undoubtedly the finding would affect the finding reached by the Income-tax Officer in the assessment of the Kamptee firm to which we have already adverted. The result therefore was inevitable. A notice was issued under section 34 (1) (b) of the Income- tax Act and the Department sought to bring to assessment the item of Rs. Totality extent undoubtedly the finding would affect the finding reached by the Income-tax Officer in the assessment of the Kamptee firm to which we have already adverted. The result therefore was inevitable. A notice was issued under section 34 (1) (b) of the Income- tax Act and the Department sought to bring to assessment the item of Rs. 5,10,788, and it is the validity of that notice that is questioned in the present reference. The question referred is "Whether under the facts and circumstances of the case there was any information before the Income-tax Officer seeking to reopen the assessment so as to invest him with jurisdiction to issue notice under section 34 (1) (b) of the Income-tax Act" 6. Now, it is not in dispute in the present case that the amount is liable to tax. The only contention that has been taken before the Tribunal and as appears from the reference made was that the action taken by the Income-tax Officer was bad in law in so far as it was not in compliance with the requirements of section 34 (1) (b). The point as it is adumbrated in the question referred is that the mere fact that the Tribunal sitting in judgment over the assessment of the Bisesar House firm altered the order of the Income-tax Authorities below and held that the amount of Rs. 5,10,788 was paid not to the partners but to the Kamptee firm, did not amount to "information in his possession" so far as the Income-tax Officer was concerned and nor could it be said that in consequence he had "reason to believe" and that therefore there was no jurisdiction in him to proceed under section 34 (1) (b). It is not in dispute that the relevant provision of law which is attracted in the present case is section 34 (1) as it stood before the amendment in 1956 but after t};1e amendments of 1948. The relevant provision reads thus: "340. Income escaping assessment. (1) (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an alIl1el188ll to make a return of his income under section 22 for any year or to diaolos6 fully and truly all material facts necessary for his assessment for that year, income profit it or gain. Income escaping assessment. (1) (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an alIl1el188ll to make a return of his income under section 22 for any year or to diaolos6 fully and truly all material facts necessary for his assessment for that year, income profit it or gain. chargeable to income-tax have escaped assessment for that year, or have been under assessed, or assessed at too Iowa rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance huge been computed, or (b) notwithstanding that there has been no omission or failure as motioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits "2nd gains chargeable to income-tax have escaped assessment for any year, or have been underassessed, or aS88I8. ed at too Iowa rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years sol the end of that year, serve on the 8lI8essee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and may proceed to asses or reassess such income, profits or gains or compute the loss or depreciation allowance; and the provisions of this Act shall so far as may be, apply accordingly as if the notice were a notice issued under that sub-section; Provided that- (i) the Income-tax Officer shall not issue a notice under this sub-section, unless has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the i88ue of 8uoh notice; (ii I the tax shall be chargeable at the rate of which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as tile call may be and (Hi) where the assessment made or to be made ail an assessment made or to be made on a personal deemed to be the agent of a non-relident person under section 4,3, this sub-section shall have effect as if for the periods of eight years and four years a period of one year was substituted." 7. The contention that has been raised on behalf of the &ll8eS88e is that the facts and circumstances established do not warrant the conclusion that the Income-tax Officer had "information in his possession" that income, profits and gains have escaped assessment for any year or have been under assessed. 8. In the first place, the present section makes a considerable departure from the law as it stood prior to its amendment in 1948. ,Prior to that amendment the section ran as follows: "34,. 8. In the first place, the present section makes a considerable departure from the law as it stood prior to its amendment in 1948. ,Prior to that amendment the section ran as follows: "34,. (1) If in consequence of definite information which baa become into his possession the Income-tax Officer discovers that income, profit, or gains chargeable to income tax have escaped assessment in any year, or have been under assessed, or have been assessed at too low a rate, or have been the subject of exercise relief under this Act, the Income-tax Officer may, in any case in which he baa reason to believe that the 8818aee has concealed the particulars of his income or definitely furnished inaccurate particulars thereof, at any time within eight years, and m. any other cast\ at any time within four years of the end of that year, believe on the person liable to pay tax………… a notice……….’ It will be noticed that the amendments made a radical departure in two respects: firstly in that the amendments omitted the word "discovers" from the body of the section, and secondly, instead of the words "in consequence of definite information" the words now used are "has in consequence of information in his possession reason to believe". The difference brought about in the section after the amendment would in the first place render some what otiose the view previously taken as to the effect of the word "discovers" and all the learning that has gathered round that word, particularly as to whether it must be something new that the Income-tax Officer finds before he can Act. At present the requirements of the law are that he must have information in his possession and on the basis of that information he must have reason to believe; and the question is whether on the facts and in the circumstances of the present case he had such information and he had reason to believe. 9. Mr. Thakar urged that there was no information in the po88e8sion of the Income-tax Officer when he issued the notice under section 34 (1) on 9-1.1952. He has pointed out that the item of Rs. 5,10,788 which is now sought to be brought to tax was already shown in the return initially filed by the assessment-firm. 9. Mr. Thakar urged that there was no information in the po88e8sion of the Income-tax Officer when he issued the notice under section 34 (1) on 9-1.1952. He has pointed out that the item of Rs. 5,10,788 which is now sought to be brought to tax was already shown in the return initially filed by the assessment-firm. He pointed out that all that the firm there stated was that since that income had already been taxed in the hands of the Bisesar House firm, it could not be the subject of double taxation and therefore though the assessment firm had shown it in its return it had claimed that it could not be taxed. On that view, he submitted that not a single fact was hidden from the Income- tax Officer and therefore when he sought to serve a notice under section 34 (1) (b) he could not be said to have any information in his possession at all which was unknown to him previously. 10. It seems to us however that the case is not as simple as that. No doubt, the amount of Rs. 5,10,788 was shown in the initial return filed by the assessee firm, but at the time that income was dealt with by the Income-tax Officer, the assessment of the Bisesar House firm had already been made and the view taken was that the Kamptee firm was a partner in the Bisesar House firm or at any rate its partners were partners of the Bisesar House firm and therefore the amount of Rs 5,10,788 could not be claimed by the Bi3esar House firm as a legitimate expense for the simple reason that the payment of interest to partners could not be an expense made by the firm to which the partners belong. Upon this view, undoubtedly the Income-tax Officer who decided the asseuee. firms assessment could not have any "information", because the facts as they were already known were indicated in the return of the &Il8e88ee-firm. But it was later on when the Biseaar House firm filed its appeal before the Income-tax Appellate Tribunal that the legal position was completely altered. According to the Tribunal. R. B. Bansilal Abirchand firm was a completely different legal entity from the Bisesar House firm, and, therefore what was originally not allowed as a legitimate expense could thereafter be allowed as a legitimate expense. According to the Tribunal. R. B. Bansilal Abirchand firm was a completely different legal entity from the Bisesar House firm, and, therefore what was originally not allowed as a legitimate expense could thereafter be allowed as a legitimate expense. In that event, and upon that view inevitably the payment of Re. 5.10.788 became an income of the Kamptee firm because that firm was not a part and parcel of the Bisesar House firm but was a different legal entity. Now, it was these facts and this legal position which for the first time were brought to light by the order of the Tribunal on 23.2-1950. We have no doubt that this complete alteration in the relative position of the two firms adjudged by the Tribunal constituted "information" within the meaning of section 34(I)(b) and that consequent upon that information any officer of the Department would have reason to believe that the item of &s. 5,10;788 was either not brought to tax or under assessed. 11. Mr. Thakar referred to some cases upon this point to show that even under these circumstances the alteration in the findings as to the legal relationship between the Kamptee firm and the Bisesar House firm would not constitute "information". According to him, it Was nothing except reiteration of the true legal position and therefore could not be held to •be information which had come into the hands of the Income-tax Officer. The two cases cited were Income-tax: Appellate Trinal v. B.P. Byramji & of (I) and New Victoria Mills of Ltd. v. commissar of lncome-tax: (2). These are unfortunately both cases under the provisions of section 34 before its amendment and the deieticon of the word "definite" before "information" in the section. It will be noticed that in both the cases emphasis has been laid upon the words "definite information"as they occurred in the unamended section. But apart from that, the two cases were decided upon facts which were wholly different. It will be noticed that in both the cases emphasis has been laid upon the words "definite information"as they occurred in the unamended section. But apart from that, the two cases were decided upon facts which were wholly different. In Income-tax Appellate Tribunal v. B. P. Byramji & of (I) the assessee had been assessed under the Finance Act of 1938, whereas in the proceedings commenced by the notice under section 34 subsequently the same assessee Was sought to be reassessed on the short ground that he should have been assessed not under the Finance Act of 1938 but under the Finance Act of 1939 and as stated in the judgment itself it was admitted "that the definite information consisted only of his (Income - tax Officers) view of the law as to whether the rates of the Finance Act of 1938 01 1939 were applicable and that in his view, the rates in the latter Act should have been applied." It was in these circumstances that the Nagpur High Court held that the view of the successor of the Income-tax Officer even thought it was correct was not based on any definite information coming into his possession but he only corrected a mistaken view of the law applicable, setting his Own opinion against that of his predecessor, and that was not a sufficient ground for reopening the assessment under section 34 as amended in 1939. The circumstances here are wholly different. In the present case, what has been found is based on the facts and circumstances of the &8l1essment of the Bisesar House firm and upon those facts it was found that the Kamptee firm was not , partner of the Bisesar House firm, and the circumstances therefore upon which that finding was reached would constitute information . 12. Similarly in the case of New Victoria Mills 00. Ltd. v. Commissioner of lncome-tax: (2) the Department had sought to bring to tax an item which had previously been adjudicated Upon by the Tribunal and it was held that since the Tribunal had held that the sum was an allowable expenditure of the Company that alone could not be said to be definite information which led to the discovery that the assessees income had escaped aMe8smentand therefore the revision of the assessment under section 34 W&8 not justified. It may incidentally be mentioned also that the words which fell for interpretation in that case were the words of the unamended section "definite information". 13. Reliance was next placed on a recent decision of this Court hi K. T. Kubal & of (Pvt.) Ltd. v. Commissioner of Income-Tax (3). The facts in that case were peculiar. The assessee Company had paid certain amounts by way of commission to one of its employees and the Department had taken the view that those amounts were not paid as legitimate expense but for certain secret commissioners in the nature of illegal-gratification and therefore it disallowed certain portions of those items. but allowed lesser amounts under four headache. When appeals were preferred by the assessee regarding the portions disallowed, the Tribunal made a casual remark in its judgment that even the portions which have been allowed ought not to hay. been allowed and that the deductions should have been wholly disallowed. Consequent upon that remark, a notice under section 34 came to be issued and this Court ultimately held that the notice was bad. This Court had occasion to observe in that case that a mere change of opinion on the part of the Tribunal regarding the admissibility of certain amounts as business expenditure would not constitute "information" within the meaning of section 34 (1) (b). 14. It may be mentioned here that the High Court stressed two facts, namely, that the items regarding which the observation was made by the Tribunal were not the subject-matter of the appeal before the Tribunal; in other words, those items being allowed by the Income-tax Officer, the Department had not come up in appeal before the Tribunal and therefore the Tribunals remarks were completely obiter so far as those items were concerned. Secondly, all that the Tribunal did in that case was that upon the same flocks and inform. ation it changed its view. That therefore was held not to be "information" within the meaning of section 34 (1) (b). Secondly, all that the Tribunal did in that case was that upon the same flocks and inform. ation it changed its view. That therefore was held not to be "information" within the meaning of section 34 (1) (b). In the present case, the distinguishing feature is that when the Tribunal, dealing with the Bisesar Houses assessment, remarked that the Kamptee firm was a different legal entity from the Bisesar House firm, that very question was up before it for adjudication and therefore it came to a legal determination upon that question and it did not as in Kubals case (1) make any obiter remarks unconnected with the case. The passed in the present case by the Tribunal in the Bisesar House assessment would be an effective or operative order and to that extent alter the rights of the parties. Therefore, that order showing that alteration would constitute "information" within the meaning of section 34 (1) (b). 15. It seems to us that upon the facts stated here there is not the slightest doubt that the altered situation as indicated in the order of the Tribunal dated 23.2-1950 showing the true relationship between the assessee firm and the assssesar House firm affected the assessment of the assessee firm andgaveinform ation to the Income-tax Officer upon which he could have reason to believe that the assessee firm had not been assessed on this item or had been under-assessed. In our opinion, an alteration of the legal position of an assessee firm in consequence of an order passed in an ancillary proceeding of another firm having common partners would itself constitute "information", within the meaning of section 34 (1) (b). Ina recent decision of their Lordships of the Supreme Court of India in Maharaj Kumar Kamal Singh v. Gommis8ioner of Income-tax (2) it has been held that the word "information" in section 34 (1) (b) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions. Of course, it is not necessary in the present case to go as far as that. Of course, it is not necessary in the present case to go as far as that. But .we have cited this decision to show that even an unconnected judicial decision giving information as to the state of the law would itself amount to "information" within the meaning of section 34:(I)(b); much more so then would a judicial decision in a connected case and between assessees who have common partners be "information". fit amounted to information, there was no dispute raised that, the officer would have "reason to believe" . 16. In the result, therefore, we answer the question posed in the affirmative. The assessee shall pay the costs of the Commissioner. Reference newsreader in the affirmative.