Summarize the following court judgment. Appeals Nos. 143 to 145 of 1954	 27 to 30 and 161 to 164 of 1956. Appeals from the judgment and order dated September 14	 1953	 of the former Travancore Cochin High Court in Original Petitions Nos. 53	 56 and 57 of 1952. Appeals from the judgment and order dated December 14	 1954	 of the Mysore High Court in C. P. Nos. 755 52 and 53 and W. P. Nos. 105 and 106 of 1954. Appeals from the judgment and order dated March 22	 1955	 of the Mysore High Court in Writ Petition No. 122 of 1954 and order dated April 7	 1955	 in W.P. Nos. 35	 36 and 37 of 1955. K.S. Krishnaswami Iyengar	 M. U. Isaac and Sardar Bahadur	 for the appellants in C. As. 143 45 of 1954. H. N. Sanyal	 Addl. Solicitor General of India	 B. Gana pathy Iyer and R. H. Dhebar	 for the appellants in C. As. 27 30 and 161 164 of 1956. R. Ganapathy Iyer and R. H. Dhebar	 for the respondent in C. As. 143 145 of 1954. A. V. Viswanatha Sastri and G. Gopalakishnan	 for the respondents in C. As. 27 30 of 1956. A. V. Viswanatha Sastri	 K. R. Choudhury and G. Gopalakri shnan	 for the respondents in C. As. 161 164 of 1956. April 28. The Judgment of the Court was delivered by S.K. DAS J. This judgment relates to and governs eleven appeals which for convenience have been classified into two groups. The first group may be called the group of Travancore Cochin appeals	 and within this group fall Civil Appeals Nos. 143 to 145 of 1954. The	 second group may be called the group of Mysore appeals and within this group are eight appeals	 namely	 Civil Appeals Nos. 27 to 30 of 1956 and 161 to 164 of 1956. By reason of the circumstance that certain common questions of law and fact arise in all these eleven appeals	 they have been heard one after the other; but it will be convenient and will avoid confusion if we state the facts relating to the Travancore Cochin group first and then deal with the questions arising therefrom. We shall then state the additional facts of the Mysore group of appeals	 and answer the questions arising therefrom	 in so far only as they have not been answered already in relation to the Travancore Cochin group. It may be here added 756 that in the Travancore Cochin appeals (Civil Appeals 143 to 145 of 1954) the appellant is the assessee	 A. N. Lakshmana Shenoy	 of Messrs. New Guna Shenoy Company	 Ernakulam	 and the two respondents are the Income tax Officers of Ernakulam in Cochin and of Kottayam in Travancore. In the other group of appeals	 namely	 the Mysore appeals	 the appellants are the Income tax Officers of certain income tax circles in Bangalore and the respondents are assessees who carry on business within the jurisdictional area of the said Income tax Officers. In the Travancore Cochin appeals	 the High Court of Travancore Cochin came to a decision against the assessee	 while in the Mysore appeals the High Court of Mysore came to an opposite conclusion on identical questions of law; that is why in the first group of appeals the assessee is the appellant and in the second group the appellants are the Income tax Officers. Travancore Cochin appeals: We proceed now to deal with the Travancore Cochin appeals. The assessee	 A. N. Lakshmana Shenoy	 is a hardware merchant who carried on his trade and business for several years in the then States of Travancore and Cochin	 with his headquarters at Ernakulam in Cochin. He was assessed to income tax in both the States under the income tax law in force there	 namely	 the Cochin Income tax Act of 1117 M. E. (hereinafter referred to as the Cochin Act) and the Travancore Income tax Act of 1121 M. E. (hereinafter referred to as the Travancore Act). He was so assessed by the Incometax Officer at Ernakulam for the Cochin State and the Income tax Officer at Kottayam for the Travancore State. It is a matter of history that Cochin and Travancore were formerly independent States	 and till the lapse of paramountcy	 the Crown as represented by and operating through the political authorities provided the nexus between those States and the Central Indian Government. The Indian Independence Act	 1947	 released the States from their obligation to the Crown; but in August	 1947	 the Rulers of the two States acceded to the Dominion of India. This was followed by a process of 757 two fold integration the consolidation of the States into sizeable administrative units and their democratisation. On May 27	 1949	 the Rulers entered into a covenant which was concurred in by the Government of India. By that covenant the Rulers agreed that as from the first day of July	 1949	 the States of Travancore and Cochin should be united in and form one State with a common executive	 legislature and judiciary by the name of the United State of Travancore and Cochin. The covenant further provided that " there shall be a Rajpramukh for the United State and the Ruler of Travancore shall be the first Rajpramukh; the executive authority of the United State shall be exercised by the Rajpramukh and there shall be a council of ministers to aid and advise him ". Article IX of the covenant said that " the Rajpramukh shall within a fortnight of the appointed day execute on behalf of the United State an Instrument of Accession in accordance with the provisions of section 6 of the Government of India Act	 1935	 and in place of the earlier Instruments of Accession of the covenanting States; and he shall by such Instrument	 accept as matters with respect to which the Dominion Legislature may make laws for the United State all the matters mentioned in List I and List III of the Seventh Schedule to the said Act	 except the entries in List I relating to any tax or duty ". There was a proviso to the Article which said that nothing in the Article shall be deemed to prevent the Rajpramukh from accepting any or all of the entries in the said List I relating to any tax or duty as matters with respect to which the Dominion Legislature may make laws for the United State. On July 14	 1949	 a supplementary Instrument was executed by the Rajpramukh by which he accepted	 on behalf of the United State	 all matters enumerated in List I and List III of the Seventh Schedule to the Government of India Act	 1935	 as matters in respect of which the Dominion Legislature might make laws for the United State	 subject	 however	 to "the proviso that nothing contained in the said lists or in any other provision of the Government of India Act	 1935	 shall be deemed to empower the 758 Dominion Legislature to impose any tax or duty in the territories of the United State. The result was that in spite of the integration and accession of the United State to the Dominion of India	 the Cochin Act continued to be in force in the territory formerly known as Cochin and the Travancore Act in the territory known as Travancore. On November 24	 1949	 there was a proclamation by the Rajpramukh which stated that in the best interests of the United State of Travancore and Cochin it was desirable that the constitutional relationship established between the United State and the Dominion of India shall not only be continued	 but the relation as between that State and the contemplated Union of India shall be further strengthened ; it was then stated that the Constitution of India as drafted by the Constituent Assembly of India which included duly appointed representatives of the United State provided a suitable basis for strengthening the relation between the two States. The proclamation then went on to say ' 'And whereas by virtue of the power vested in it under the Covenant establishing this State	 the Legislative Assembly of the State has resolved that the Constitution framed by the Constituent Assembly of India be adopted by this State. I now hereby declare and direct That the Constitution of India shortly to be adopted by the Constituent Assembly of India shall be the Constitution for the United State of Travancore and Cochin as for the other parts of India and shall be enforced as such in accordance with the tenor of its provisions. That the provisions of the said Constitution shall as from the date of its commencement	 supersede and abrogate all other constitutional provisions inconsistent therewith which are at present in force in this State. " The Constitution of India came into force on January 26	 1950	 and on that date Travancore Cochin became one of the Part B States within the Constitution of India. Under that Constitution the subject of "taxes on income other than agricultural income" was 759 included in the Union Legislative List and Parliament alone ' had exclusive power to; make laws in respect thereof All laws in force in the territory of Travancore Cochin became subject to the Constitution of lndia when it came into force; but article 277 of the Constitution enaccted " Any taxes	 duties	 cesses or fees which immediately before the commencement of this Constitution	 were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State municipality	 district or other local area may	 notwithstanding that those taxes	 duties	 cesses or fees are mentioned in the Union List	 continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law. The result of the aforesaid provision of the Constitution was that the taxes leviable under the Cochin Act or the Travancore Act continued to be so levied until provision to the contrary was made by Parliament by law. Such provision was made by the Finance Act	 1950 (XXV of 1950). Section 3 of that Act extended the Indian Income tax Act	 1922	 to the whole of India except the State of Jammu and Kashmir	 with effect from April 1	 1950. The interpretation of section 13 (1) of this Finance Act	 1950	 is one of the questions argued in these appeals	 and the relevant provision of that sub section must be quoted in full "If immediately before the 1st day of April	 1950	 there	 is in force in any Part B State other than Jammu and Kashmir	 or in	 Manipur	 Tripura or Vindhya Pradesh or in the merged territor of CoochBehar any law relating to income tax or super tax or tax on profits of business	 that law shall cease to have effect except for the purposes of the levy	 assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act	 1922	 for the year ending on the 31st day of March	 1951	 or for any	 subsequent year	 or	 as the case may be	 the levy	 assessment and collection of 97 760 the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March 1949. Provided that any reference in any such law to an officer	 authority	 tribunal or court shall be construed as a reference to the corresponding officer	 authority	 tribunal or court appointed or constituted under the said Act	 and if any question arises as to who such corresponding officer	 authority	 tribunal or court is	 the decision of the Central Government thereon shall be final: ". So far we have traced the constitutional history of the integration of Travancore Cochin	 its accession to the Dominion of India and finally its acceptance of the Constitution of India whereby it became a Part B State within the Constitution of India. We now go back to the story of the assessments made on the assessee. The income of the assessee for the two accounting years	 1122 and 1123 M.E. (corresponding to the years ending on August 16	 1947	 and August 16	 1948	 respectively) was assessed in the two assessment years	 1123 and 1124 M.E. in accordance with the Cochin Act by the Income tax Officer at Ernakulam by his orders dated July 28	 1949	 and January 31	 1950	 respectively. These assessments	 the assessee alleged	 became final and he paid the taxes accordingly. Similarly	 the income of the assessee in Travancore for the accounting years 1122 and 1123 M.E. was assessed under the Travancore Act for the assessment years 1123 and 1124 by the Income tax Officer	 Kottayam	 by his orders dated April 11	 1949	 and July 30	 1949	 and these assessments also	 according to the assessee	 became final and he paid the taxes accordingly. The income of the assessee for the accounting year 1124 M.E.was assessed under the Indian Incometax Act ' 1922	 in the assessment year 1951 52 by the Income tax Officer	 Ernakulam	 by his order dated January 21	 1952. The account books of the assessee were rejected as unreliable and the Income tax Officer	 Ernakulam	 made a " best of judgment " assessment. This assessment order is Ext. VIII in the record. The assessee appealed against it and	 subsequently	 on 761 December 14	 1953	 that is	 subsequent to the decision on the three writ petitions filed in the High Court of Travancore Cochin	 the Appellate Assistant Commissioner	 Trivandrum	 passed an order which has been produced before us with an application for taking it on the record. We accepted the application and both the assessment order	 Ext. VIII dated January 21	 1952	 and the appellate order dated December 14	 1953	 will be duly considered by us. On February 12	 1952	 the Income tax Officer	 Ernakulam	 issued four notices to the assessee	 two under section 44 of the Cochin Act and two under section 47 of the Travancore Act stating therein that in consequence of definite information which had come into his possession	 he had discovered that the income of the assessee assessable to income tax for the assessment years 1123 and 1124 M. E. had been under assessed and the Income tax Officer	 therefore	 proposed to re assess the said income; the assessee was asked to submit a return in respect of his total world income	 for the two years in question. On March 14	 1952	 the Income tax Officer	 Kottayam	 issued two similar notices to the assessee under section 47 of the Travancore Act stating therein that he had discovered in consequence of definite information which had come into his possession that the income of the assessee for the two years 1123 and 1124 assessable to income tax had either escaped assessment or had been under assessed or had been assessed at too low a rate and therefore be proposed to re assess the said income. Presumably	 the Incometax Officer	 Kottayam	 issued the two notices	 because it was doubtful if the Income tax Officer	 Ernakulam	 had authority to issue notices to the assessee under the Travancore Act. Nothing	 however	 turns upon this	 so far as the appeals before us are concerned. On June 16	 1952	 the assessee filed a writ petition in the High Court of Travancore Cochin in which he challenged the jurisdiction of the Income tax Officer	 Ernakulam	 to re assess his income for the two assessment years	 1123 and 1124 M. E. On the very day on which the assessee filed his writ petition	 the Incometax Officer	 Ernakulam	 made an " escaped income " 762 assessment under section 44 of the Cochin Act for the assessment year 1123. This ' order was communicated to the assessee on June 17	1952	 and the assessee filed a second writ petition in	 the High Court TravancoreCochin ion June 19	 1952	 in which he again challenged the	 jurisdictions of the Income tax Officer	 Erhakulam to make the assessment Linder section 44 of the Cochin Act and further said ' that %the assessment was made in spite of his application for adjournment 'and an 'order of stay passed by the High Court on June 17	 1952. On June 20	 1952 the assessee filed a third writ petition in the Travancore Cochin High Court in respect of the two notices issued to him by the Income tax Officer	 Kottayam. By this writ petition the assessee challenged the jurisdiction of the Income tax Officer	 Kottayam	 to issue the two notices; in question under section 47 of the Travancore Act. ;These three writ petitions	 numbered as original petitions 53	 56 and 57 of 1952	 were dealt with together by the TravancoreCochin High Court and a Bench of three Judges of the said High Court held by their judgment and order dated September 14	 1953	 that the	 two Income tax Officers concerned had jurisdiction to re assess the income of the assessee for the: two assessment years 1123 and 1124 M. E. They accordingly dismissed the writ petitions	 but without costs. They	 however	 gave a certificate that the cases were fit for appeal to the Supreme Court under article 133 of ' the Constitution and on that certificate the three appeals	 which we have called Travancore Cochin appeals	 have been brought to this Court	 from the judgment and order of the High Court of Travancore Cochin dated September 14	 1953. In the High Court three main points were urged on behalf of the assessee : the first point taken was that with the passing of the Finance Act	 1950	 which made Travancore Cochin a " taxable territory " within the meaning of the Indian Income tax Act	 1922	 incometax laws of Travancore and Cochin became void and inoperative and Parliament could not	 under section 13	 keep alive the Income tax Acts of Travancore and 'Cochin	 or any	 provisions thereof	 inconsistent with 763 the Constitution Section 13 of the Finance Act	 1950	was	 therefore	 invalid in so far as it tried to keep alive the Cochin Act or the Travancore Act for the purpose of levy	 assessment and collection of incometax	 for	 the period referred to therein. The second contention was that even if section 13 of the Finance Act	 1950	was valid and kept alive the provisions of the Cochin Act and the Travancore Act	 it did so only " for the purpose of the levy	 assessment and collection of income tax and super tax " in respect of the period mentioned in the section	 and section 13(1) did not have the	 effect of saving the provisions of the Travancore Act or Cochin Act for	 the purpose of " re assessment of income tax and super tax ". The third contention urged was that neither of the two Income tax Officers concerned had any definite information in consequence of which they came to any discovery that the income of the assessee for the two years in question had been under ' assessed or escaped assessment or had been assesed at too low a rate. It was contended on behalf of the assessee that the statements in the notices with regard to definite information etc. were only " a pretence to clutch at jurisdiction " and the very foundation of the action sought to be taken by the Income. tax Officers under section 44 of the Cochin Act or section 47 of the Travancore Act was non existent. The learned Judges of the High Court negatived the aforesaid contentions	 and as we have already stated	 the writ petitions. Before us the first point urged on behalf of the assessee in the High Court has not been pressed. The other two points	 namely	 (1) the true construction of section 13(1) of the Finance Act	 1950	 and (2) tile absence of any foundation for the action sought to be taken under section 44 of the Cochin Act or section 47 of the Travancore Act have been pressed with great vehemence. A third point which was specifically raised in the Mysore appeals in the High Court there and which arises in the Travancore Cochin appeals also	 has been taken :before us	 though it was not specifically taken in the High Court of Travancore Cochin. We have allowed learned counsel for the assessee to raise the point	 as 764 it involves a pure question of law. The point is this. In the wake of accession and political integration of the States and Unions of States with India arose the problem of federal financial integration. The States 	and Unions of States	 so long as they continued as separate units	 had retained their own pre existing public finance structures. They had one common feature	 distinguishing them from the Provinces of India	 in that except in respect of certain matters covered by the Standstill Agreements	 the States were free to follow their own policies in matters of federal finance and taxation	 that is to say	 in the field of public finance	 such as customs	 income tax	 central excise	 railways	 posts and telegraphs etc. When the question of integration of these States with India arose	 naturally the question of extinguishing the special rights and obligations of the States in the field of federal finance and of making good to them the net gap in their revenues also arose. By a resolution dated October 22	 1948	 the Government of India appointed a committee of experts	 referred to as the Indian States Finances Enquiry Committee	 to consider the problem of federal finance. The Committee 's terms of reference were	 inter alia	 as follows " To examine and report upon: (1)the present structure of Public Finance in Indian States and Unions of States; (2)the desirability and feasibility of integrating Finance in Indian States and Unions of States with that of the rest of India	 to the end that a uniform system of Federal Finance may be established throughout the Dominion of India; (3)whether	 and if so	 the extent to which the process of integrating Federal Finance in the Indian States and Unions with that of the rest of India should be gradual and the manner in which it should be brought about; and the machinery required for his purpose	 especially as regards the legislative groundwork and the administrative Organisation necessary for the imposition	 assessment and collection of federal taxes; ". The Committee submitted a report in due course and 765 made certain recommendations. On the basis of those recommendations certain agreements were entered into between the President of India and the Rajpramukhs	 including the Rajpramukh of Travancore Cochin and the Rajpramukh of Mysore. We shall refer in somewhat greater detail to these agreements	 particularly the agreements entered into by the Rajpramukhs of Travancore Cochin and Mysore. The contention on behalf of the assessee is that these agreements with Part B States with regard to certain financial matters received constitutional sanctity in article 278 of the Constitution (now repealed by the Constitution (Seventh Amendment) Act	 1956). Article 278	 so far as it is relevant for our purpose	 was in these terms " 278 (1). Notwithstanding anything in the Constitution	 the Government of India may	 subject to the provisions of clause (2)	 enter into an agreement with the Government of a State specified in Part B of the First Schedule with respect to (a)the levy and collection of any tax or duty leviable by the Government of India in such State and for the distribution of the proceeds thereof otherwise than in accordance with the provisions of this Chapter ; (b). . (c). . and	 when an agreement is so entered into	 the provisions of this Chapter shall in relation to such State have effect subject to the terms of such agreement. " The argument on behalf of the assessee is that the recommendations of the Indian States Finances Enquiry Committee which were accepted by the Rajpramukh of Travancore Cochin in the agreement entered into by the Rajpramukh with the President of India on February 25	 1950	 were designed to secure " legal continuity of pending proceedings " and " finality and validity of completed proceedings " under the preexisting State legislation ; therefore	 section 13(1) of the Finance Act	 1950	 should be so construed as to be in consonance with the aforesaid agreement	 and	 in the alternative	 if section 13(1) is construed to be at variance with the aforesaid financial agreement	 it should be 766 held to be void by reason of the; provisions; of articles 278 and 295 of the Constitution. We proceed now to a consideration in detail of the arguments urged before us on behalf of the assessee in the Travancore Cochin appeals. In logical sequence the point as to the absence of foundation for the action taken by the two Income tax Officers of Ernakulam and Kottayam in the matter of the issue	 of" notices. for reassessment	 comes first and we propose now to deal with it. It is necessary at this stage to set out the two sections under which the Income tax Officers proposed to take action against the assessee. The two sections are section 44 of the Cochin Act and section 47 of the Travancore Act. Section	 44 of the Cochin Act	 so far as it is relevant for our purpose	 is in these terms " 44(1) If in consequence of definite information which has come	 into his possession the Income tax Officer discovers	 that income ' profits 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 excessive relief under this Act the Income tax Officer way	 in any case in which he has reason to believed that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars thereof	 at any time within eight years	 and in any other case at any time within four years of the end of that year	 serve	 on the person liable to pay tax on such income	 profits or gains	 or	 in the case of a. company	 on the principal officer thereof	 a notice containing all or any of the requirement	 which may be included in a notice under sub section (2) of section 27	 and	 may proceed to assess or re assess such income profits or gains	 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. " Section 47 (1) of the Travancore Act is identical ill terms and need not therefore be	 quoted. It is worthy	 of note that the terms of the. aforesaid two sections are similar to section 34 of	 the Indian Income tax Act	 1922	 as it	.stood after the amending Act of 1939 and	 before the amendments of 1948. The two requisites conditions 767 for the application of the section are contained in the first part	 and they are: firstly	 there must be definite information which has come into possession of the Income tax Officer and	 secondly	 in consequence of that information	 the Income fax Officer discovers that		 income	 profits or gains chargeable to income tax have escaped assessment in any year etc. It is only when these two conditions are fulfilled that the Income tax Officer can take necessary action under section 44. The question before us is whether these two conditions were fulfilled in the cases out of which the TravancoreCochin appeals have arisen. As in the High Court so also before us	 the only document on which the Income tax Officers relied for this part of their case is Ext. This document	 according to the Income tax Officers	 furnished the definite information in consequence of which they made the necessary discovery. Learned counsel for the assessee has taken us through Ext. VIII	 Ext. A (statement of the case submitted by the assessee to the Appellate Assistant Commissioner) and the order of the Appellate Commissioner	 dated December 14	 1953	 and he has contended that (1) Ext. VIII does not relate to the years in question and cannot	 therefore	 constitute definite information for those years; (2) it gives certain highly speculative grounds for discrediting the account books of the assessee	 which grounds have not been accepted by the Appellate Assistant Commissioner; and (3) in any view	 it contained no information on which the Income tax Officers could be said to have made any discovery. As to (1) above	 the High Court rightly pointed out that Ext. VIII contained information of a kind which disclosed a definite and systematic pattern of transactions for avoidance of tax not only in respect of the year covered by the order but spread over years anterior to it. Secondly	 Ext. VIII disclosed	 according to the Income tax Officers concerned	 a systematic suppression of cash Bales.	 a regular trade in purchase and sale of controlled commodities at profiteering rates	 passing bogus bills for purchases	 understating stocks	 segregating stocks 98 768 for clandestine sales	 and selling goods to the branches at artificial book losses. There can be no doubt that all this information	 if honestly believed	 would reasonably support the opinion of the Income tax Officers that there is a discovery of " escaped " income etc.	 within the meaning of section 44 of the Cochin Act and section 47 of the Travancore Act. But learned counsel for the assessee argues that while it may be right to say that Ext. VIII prima facie contains the kind of information which will satisfy the conditions of section 44 of the Cochin Act and section 47 of the Travancore Act	 we must take note of the fact that according to the Appellate Assistant Commissioner	 as shown by his order dated December 14	 1953	 the so called information contained in Ext. VIII was really non existent	 and the information being non existent	 there was no foundation for the action taken by the Income tax Officers. We are unable to accept this argument as correct. Apart from the consideration that the order of the Appellate Assistant Commissioner was not available when the Income tax Officers issued their notices	 we think that the argument overstates the effect of the order of the Appellate Assistant Commissioner. It is true that the Appellate Assistant Commissioner considered in detail the various criticisms of the Income tax Officer with regard to the account books along with the explanations offered on behalf of the assessee; but he expressed his final conclusion in the following words: " I have given my careful consideration to the various adverse criticisms of the Income tax Officer and to the Advocate 's answers thereto. I have also looked into the accounts and other revelant papers. As a result	 I am satisfied that the Income tax Officer 's criticisms are in most cases not at all well founded and that the Advocate has successfully met almost every point raised by the former. In fact	 the Income tax Officer himself admitted at the time of the hearing that has order was shown to be quite vulnerable. But he contended that it would not be enough if the Advocate merely answered the specific criticisms in the order and that the case should be looked at as a whole and a decision should be arrived at as to whether on such 769 a comprehensive view the appellant 's accounts could be regarded as completely faultless and worthy of unquestioned acceptance. Seen from this broad angle	 it cannot of course be said that the accounts are free from defects. There is firstly no stock book for uncontrolled goods and the accuracy of the inventories of opening and closing stocks of such goods is therefore open to doubt. Again	 whatever may be the appellant 's reasons for not recording full details for cash sales	 there is the admitted fact that the cash sales stand partly unvouched and details as to the names and addresses of purchasers are not available for the major part of the year	 and there is therefore no possibility of satisfying one self whether all the cash sales have been duly brought to account. There is also the further fact that at least some of the purchases are not satisfactorily vouched and that the rates of gross profit disclosed by the accounts both at the head office and the branches are not quite adequate. These	 in my opinion	 are sufficient grounds for discrediting the book results and resorting to an estimate of the turnover as well as the gross profit. " It cannot	 therefore	 be Raid that the order of the Appellate Assistant Commissioner washed out the entire information contained in Ext. VIII so as to strike at the very root of the jurisdiction of the Income tax Officers concerned to issue the notices in question. It is to be remembered that there is a distinction between receipt of definite information as a consequence of which a discovery is made and a notice is issued	 and the final determination as to the liability or extent of liability for escaped assessment etc. We accept as correct the view expressed in Firm Jitanram Nirmalram vs Commissioner of Income tax (1)	 that the phrase " definite information " cannot be construed in a universal sense and its meaning must depend on and vary with the circumstances of each case. There is no doubt	 however	 that the information must be definite	 that is	 more than mere guess	 gossip or rumour. There must also be a causal connexion between the information and the discovery; but " discovery " in (1) A.I.R. 1952 Pat. 770 the context of the section does not mean a conclusion of certainty at the stage of notice. What is necessary at that stage is that the Income tax Officer should have formed an honest belief upon materials which reasonably support such belief. This	 in our opinion	 is the correct view	 and judged from that standpoint	 Ext. VIII fulfilled the requirements of section 44 of the Cochin Act and section 47 of the Travancore Act. We now turn to the construction of section 13 (1) of the Finance Act	 1950. The argument on this point has meandered over a wide area; but it is really dependent on the meaning to be given to the expression for the purposes Of the levy	 assessment and collection of income tax and super tax " occurring in the section. Does the word 'assessment ' include 're assessment ' ? The contention of the assessee is that it does not. The Travancore Cochin High Court did not accept this contention	 but the Mysore High Court did in favour of the respondents in the Mysore appeals. The general scheme of the Cochin Act and the Travancore Act is the same as that of the Indian Income tax Act	 1922	 and for a clear understanding of the meaning of the expression 'levy	 assessment and collection of income tax '	 it is best to explain the general scheme of these Income tax Acts with reference to the Indian Income tax Act	 1922	 which served more or less as their model. Section 3 is the charging section which imposes liability in respect of " the total income of the previous year of every individual etc."	 and 'total income ' means the 'total amount of income	 profits and gains computed in the manner laid down in the Act '. It is clear that so far as the charging section is concerned	 the liability does not cease unless the total income	 profits and gains have been computed in the manner laid down in the Act. Section 4 states inter alia that subject to the provisions of the Act	 the total income of any previous year of any person includes all income	 profits and gains from whatever source derived. Leaving out the sections which deal with Income tax authorities we come to the sections in Chapter 111	 which explain what is 771 taxable income under different heads. Chapter IV deals with deductions and assessment	 and the words 'assessment ' and Ire assessment ' occur in several sections of this Chapter. Under section 22(2) the Incometax Officer must serve notice on any person whose total income is in the Income tax Officer 's opinion of such an amount as to render such person liable to income tax	 requiring him to furnish a return in the prescribed form of his total income during the previous year. Sub section (4) authorises the Income tax Officer to serve on any person upon whom a notice has been served under sub section (2) a further notice requiring him to produce accounts and documents	 subject to the limitation that he shall not require the production of any accounts relating to a period more than three years prior to the year previous to the year of assessment. Section 23 provides for the making of the assessment. Sub section (1) requires the Income tax Officer	 if he is satisfied that the return made under section 22 is correct and complete	 to assess the total income and to determine the sum payable. Under sub section (2) if the Income tax Officer has reason to believe that the return is incorrect or incomplete he must serve on the person who made the return a notice requiring him either to attend at the Income tax Officer 's office or to produce any evidence relied on in support of the return. Sub section (3) provides that the Income tax Officer	 after hearing such evidence as the person who made the return may produce and such other evidence as the Income tax Officer may require on specified points shall by an order in writing assess the total income and determine the sum payable. Subsection (4) makes provision for an assessment by the Incometax Officer to the best of his judgment if the assessee fails to make a return or to comply with the terms of the notices issued to him. This whole procedure	 it may be recalled	 not only applies on first assessment but is also prescribed by section 34 if for any reason income	 profits or gains have escaped assessment or have been assessed at too low a rate. Section 27 deals with cancellation of assessment in certain circumstances	 and states " the Income tax Officer shall cancel the 772 assessment and proceed to make a fresh assessment in accordance with the provisions of section 23 ". Section 29 talks of a notice of demand to the person liable to pay the tax etc. 	 the notice specifying the sum so payable. Section 30 gives a right of appeal from certain orders. Section 31 deals with. hearing of appeals and states inter alia that the appellate authority may set aside the assessment	 and direct the Income tax Officer to make. a fresh assessment. Section 33 provides for appeals against the orders of the Appellate Assistant Commissioner and sections 33A and 33B give powers of revision to the Commissioner. In appropriate cases the Commissioner can cancel the assessment and direct a fresh assessment. Then comes section 34 which corresponds to section 44 of the Cochin Act and section 47 of the Travancore Act. In substance it deals with income which has escaped assessment for one reason or another and says in the operative part that the Income tax Officer " may proceed to assess or re assess such income	 profits or gains etc. " There has been some argument before us as to the meaning of the juxtaposition of the words " assess or re assess " occurring in the section	 and it has been contended that a distinction has obviously been drawn between income which has totally escaped assessment and income which has been under assessed or assessed at too low a rate etc.	 and the word 'assess ' appropriately applies to the former case and the word ' re assess ' to the latter case. Two other sections which are relevant for our purpose are sections 66 and 67. Section 66 (7) says that notwithstanding that a reference has been made under this section to the High Court	 income tax shall be payable in accordance with the assessment made in the case. The word 'assessment ' here undoubtedly includes 're assessment '. Section 67 which bars civil suits says that no suit shall be brought in any civil court to set aside or modify any assessment made under the Act. Here again 'assessment ' must include 're assessment '	 for it cannot have been the intention that a civil suit shall lie in respect of a reassessment under section 34 but not in respect of an assessment. This brief resume of the relevant provisons of the 773 Income tax Act clearly establishes that the word assessment ' has to be understood in each section with reference to the context in which it has been used. In some sections it has a comprehensive meaning and in some a somewhat restricted meaning	 to be distinguished from a 're assessment ' or even a 'fresh assessment '. Now	 the question is in what sense has the word assessment ' been used in section 13(1) of the Finance Act	 1950. Two circumstances may be noticed at once	. The long title says that the Finance Act	 1950	 is an Act to give effect to the financial proposals of the Central Government for the year beginning on April 1	 1950	 and in section 13(1) the collocation of words is " levy	 assessment and collection of income tax". In our opinion	 both these circumstances point towards a comprehensive meaning; for it could not have been intended	 as part of the proposal of the Central Government	 that those whose income had totally escaped assessment should be liable but those who had been under assessed should go soot free. We can see nothing in the words of the section which would justify such a distinction: we say this quite apart from the argument that section 13(1) should be interpreted in consonance with the financial agreement entered into between the Rajpramukh and the President	 an argument to which we shall presently advert. Moreover	 the collocation of the words	 levy	 assessment	 and collection ' indicates that what is meant is the entire process by which the tax is ascertained	 demanded and realised. On behalf of the assessee it has been contended that (1) the Income tax Act makes a distinction between a normal or original assessment under section 23	 a fresh assessment under section 27 and a re assessment or second assessment under section 34 and (2) inasmuch as section 13 (1) uses the word I assessment only	 it must be taken to have been used in a restricted sense. In support of these contentions great reliance has been placed on the decision of the Privy Council in Commissioner of Income tax	 Bombay Presidency and Aden vs Khemchand Ramdas (1). The Mysore High Court also referred (1)(1938) L.R. 65 I.A. 236	 248. 774 to this decision in support of its view on the construction of section 13 (1). We are unable to accept these contentions as correct; nor do we think that the decision cited supports the view expressed by the Mysore High Court. The facts in Khemchands case (1) were briefly these. The firm of Khemchand applied to the Incometax Officer to have the firm registered	 the consequence of such registration being that the profits of the firm would not be assessable to super tax. On January 17	 1927	 the Income tax Officer assessed the firm to income tax for the year 1926 27 under section 23	 sub section (4) of the Act; but no super tax was imposed as the firm having applied for registration was registered. Notice of demand for the amount assessed was made in 1927. Subsequently	 the Commissioner ordered the cancellation of registration	 and directed the Income tax Officer to take necessary action thereupon. On May 4	 1929	 the Income tax Officer imposed super tax and issued a notice of demand in May	 1929. The question in the appeal was whether the Income tax authorities had any jurisdiction to assess Khemchand 's firm to super tax for the year 1926 27. Their Lordships pointed out that the powers of the Commissioner tinder section 33 could only be exercised subject to the provisions of the Act	 of which the provisions in sections 34 and 35 were important. They held that it was debatable whether the circumstances of the case were such as to bring it within section 34 and so far as section 35 was concerned	 the Income tax Officer was hopelessly barred by time. In that context	 their Lordships said: " It is possible that the final assessment may not be made until some years after the close of the fiscal year. Questions of difficulty may arise and cause considerable delay. Proceedings may be taken by way of appeal and cause further delay. Until all such questions are determined	 and all such proceedings have come to an end	 there can be no final assessment. But when once a final assessment is arrived at	 it cannot	 in their Lordships ' opinion	 be reopened except in the circumstances detailed in sections 34 and 35 of the Act (to which reference is made hereafter) and within the time (1)[1938] L. R. 65 I. A. 236. 775 limited by those sections. In the present case the liability of the respondents both for income tax and for super tax wag determined by the Income tax Officer on January 17	 1927. In the order made by him on that date he assessed the respondents to income tax at the maximum rate	 but as the respondents were at that time a registered firm he held	 as he was bound to hold	 that no super tax was to be levied. On some date before the end of March	 1927	 he served on the respondents a notice of demand for the tax that he had determined was properly leviable. The assess ment having been made under section 23	 sub section (4)	 no appeal lay in respect of it. The assessment of the respondents was therefore final both in respect of income tax and super tax. Their liability in respect of both taxes had been finally determined	 and none the less because the question of their liability to supertax had been determined in their favour. It was	 indeed	 contended before their Lordships that the assessment could not be regarded as having been determined inasmuch as the Commissioner might at any time	 and apparently after any lapse of time	 however long	 cancel the registration of the respondents as a registered firm and so subject the respondents to liability to pay super tax. Their Lordships would	 in any case	 hesitate long before acceding to a contention that would lead to so extravagant results. In their opinion	 however	 the contention cannot prevail. The Commissioner 's powers under section 33 can only be exercised subject to the provisions of the Act	 of which the provisions in sections 34 and 35 are in this respect of the greatest importance. " These observations lend no support to the view that the word" assessment" must always bear a particular meaning in the Income tax Act. On the contrary	 at p. 247 of the report	 their Lordships said: " These two questions are so closely related to one another that they can conveniently be considered together. In order to answer them it is essential to bear in mind the method prescribed by the Act for making an assessment to tax	 using the word assessment 99 776 in its comprehensive sense as including the whole procedure for imposing liability upon the tax payer. The method consists	 of the following steps. In the first place	 the taxable income of the tax payer has to be computed. In the next place	 the sum payable by him. on the basis of such computation has to be determined. Finally	 a notice of demand in the prescribed form	 specifying the sum so payable	 has to be served upon the tax payer. " If the word ' assessment ' is taken in its comprehensive sense	 as we think it should be taken in the context of section 13(1) of the Finance Act	 1950	 it would include I re assessment ' made under the provisions of the Act. Such 're assessment ' will without doubt come within the expression 'levy	 assessment and collection of income tax '. In his speech in Commissioners For General Purposes of Income Tax For City of London vs Gibbs and Others (1)	 Lord Simon has pointed out that the word 'assessment ' is used in the English Incometax Code in more than one sense; and sometimes within the bounds of the same section	 two separate meanings of the word may be found. One meaning is the fixing of the sum taken to represent the actual profit and the other the actual sum in tax which the taxpayer is liable to pay. It has been contended before us that the Finance Act and the Income tax Act should be read together as forming one Code	 and so read the words I assessment ' and I re assessment 'acquire definite and distinct connotations. We are unable to agree	 for the reasons which we have already given	 that even if we read the Finance Act along with the Income tax Act the word ' assessment ' can be given a restricted meaning. To repeat those reasons: the income tax code itself uses the word assessment in different senses	 and in the context and collocation of the words of the Finance Act	 the word 'assessment ' is capable of bearing a comprehensive meaning only. We can find no good. reasons for holding that in the matter of levy	 assessment and collection of income tax	 the Finance Act	 1950	 contemplated that some persons should enjoy a		 (1)[1942] A.C. 402	 406. 777 privilege and escape payment of the full tax leviable under the provisions of the relevant Act. On this point we approve of the decision in Firm L. Hazari Mal vs Income tax Officer	 Ambala (1)	 where Bhandari C. J.	 said "These three expressions 'levy '	 'assessment ' and 'collection ' are of the widest significance and embrace in their broad sweep all the proceedings. for raising money by the exercise of the power of taxation. . This brings us to the third question. Is there any thing in the financial agreement of February 25	 1950	 and the recommendations of the Indian States Finances Enquiry Committee	 which would restrict the meaning of the expression 'levy	 assessment and collection of income tax '? Or	 in the alternative	 bring section 13(1) of the Finance Act	 1950	 into conflict with articles 278 and 295 of the Constitution? The relevant portion of the agreement between the President of India and the Rajpramukh of TravancoreCochin dated February 25	 1950	 states: " Now	 therefore	 the President of India and the Rajpramukh of Travancore Cochin	 have entered into the following agreement	 namely : The recommendations of the Indian States Finances Enquiry Commitee	 1948 49 (hereinafter referred to as the Committee) contained in Part I of its report read with Chapters	 1	 11 and III of Part 11 of its Report	 in so far as they apply to Travancore Cochin (hereinafter referred to as the State) together with the recommendations contained in the Comittee 's Second Interim Report	 are accepted by the Parties hereto	 subject to the following modifications. " The modifications which follow have no bearing on the question at issue and need not be set out. Now	 let us examine the relevant recommendations of the Committee	 which are accepted by the Parties and form part of the agreement. These recommendations are summarised in para. 9 of the annexure to Part I of the Committee 's report	 and are set out below "Our suggestions concerning certain legal and 778 other matters of general importance	 affecting most federal subjects including taxes on income)	 which will arise in connection with federal financial integration in all States	 have been set out in paragraph 11 of Chapter 11 in Part 11 of our Report. Those relating to legal matters are	 however	 re produced below for convenient reference: " (5) Apart from the constitutional requirement in connection with the integration of federal finances in States vide paragraphs 37 and 40 Part I of our Report certain important issues of a legal nature will arise in connection with the actual taking over of " federal " subjects in the States by the Centre. This is a difficult subject upon which we are not qualified to offer competent advice. We have endeavoured	 however	 to indicate below the main features of what we conceive will be required in order to establish " continuity of proceedings " in regard to all " federal " subjects whether relating to revenues	 expenditure or Service Departments at the point of their transition from the States to the Centre;. (a)Almost every " federal " subject is dealt with in the State as in the rest of India	 under powers conferred by appropriate legislation consisting of relevant Codes	 Acts	 Ordinances and Statutory Rules and Regulations. Subject to the limitations indicated below	 which are designed to secure legal " continuity " of pending proceedings and " finality and validity " of completed proceedings under the pre existing State legislation 	 we think the whole body of State legislation relating to " federal " subjects should be repealed and the corresponding body of Central legislation extended proprio vigore to the States	 with effect from the prescribed date or as and when the administration of particular " federal " subject is assumed by the Centre. (b)For the above purpose	 as well as for future "federal" administration in States	 it may be necessary specifically to extend not merely the legislative	 but also the executive and administrative competence of the Centre	 its officers and " authorities "	 and the judicial authority of its Courts	 to the territories of the States. 779 (c)Such State Courts (except Courts of final appeal from orders of the State High Courts) as may in fact correspond to particular grades and classes of "British Indian" Courts (Civil and Criminal) may have to be statutorily " recognised " as " corresponding judicial authorities " for purpose of dealing with cases arising in the States under the " federal " laws of the Union of India; and the Supreme Court in India will have to be made the Court of final appeal from decisions of the State High Courts to the same extent as in the case of Provincial High Courts. (d) Those sections of the various Indian Acts and Ordinances which set out their territorial " extent of application " will require amending so as to include State territories with effect from the prescribed date. (e)It will be necessary to provide that all matters and proceedings pending under	 or arising out of	 the preexisting State Acts shall be disposed of under those Acts	 by so far as may be	 the " corresPonding authorities "	 (nominated by the Chief Executive Authority) under the corresponding Indian Acts. " In view of the fact that the members of the Committee themselves felt that the legal issues involved in the actual taking over of " federal " subjects in the States by the Centre constituted a difficult subject on which they were not qualified to offer competent advice and their further statement that they were merely endeavouring to indicate the main features of what they considered to be required in order to establish " continuity of proceedings "	 it has been argued before us on behalf of the Income tax authorities that it would be wrong to treat the recomendations as binding statutory rules	 even though the financial agreement between the high contracting Parties states generally that the recommendations are accepted; it is contended that the Committee in express terms states that the recommendations merely endeavour to indicate the main features of what the Committee thought was required	 and they should not be placed on a pedestal higher than what the Committee itself did. We think that there is much force in this contention; but in the view which we have taken of these 780 recommendations	 we do not think that it is necessary to decide finally what constitutional sanctity they have acquired by reason of their acceptance in the financial agreement and the provisions of article 278 of the Constitution. Assuming but without deciding that they have binding force	 what is their true meaning and effect? The argument on behalf of the assessee is that cl. (a) of the recommendations is the operative clause	 and inasmuch as it talks of " continuity of pending proceedings " and " finality and validity of completed proceedings " tinder the pre existing State legislation	 the true effect is that all assessment proceedings which have become complete and finance I by the issue of a demand notice under section 29 of the Indian Income tax Act (or corresponding section of the Cochin Act or Travancore Act) are saved under the clause and cannot be reopened; and only proceedings actually pending on the relevant date can be continued thereunder. We are unable to accept	 this as the true meaning and effect of clause (a). What is worthy of special notice is that cl. (a) specifically says that the clauses which follow it are the limitations or qualifications subject to which the whole body of State legislation is to be repealed	 and they are designed to secure two objects continuity of pending proceedings and finality and validity of completed proceedings; therefore	 cl. (a) is not the operative clause	 and it merely indicates the reasons or objects for which certain limitations or qualifications are suggested on the proposal to repeal the State legislation. Clause (a) is followed by cls. (b)	 (c)	 (d) and (e). Clause (b) which deals with executive and administrative competence of Incometax Officers and judicial authority of Courts need not detain us. So also cls. (c) and (d)	 which have little bearing on the problem before us. Clause (e) is important	 and it states that " all matters and proceedings pending under	 or arising out of	 the pre existing State Acts shall be disposed of under those Acts etc. " That a proceeding for re assessment under section 44	 Cochin Act	 or section 47	 Travancore Act	 is a proceeding arising out of the pre existing State Acts admits of no doubt	 and is clearly covered by cl. We see no good grounds 781 why full effect should not be given to it; it is one of the limitations	 as stated in cl. (a)	 subject to which the State law is to be repealed. The matter is made still more clear by what is stated in the paragraph that immediately follows	 viz. paragraph 10 of the annexure to the report of the Committee. That paragraph states " The recommendation made in the last two subparagraphs quoted above should be understood as requiring that all income	 profits and gains accruing or arising in States	 of all periods which are " previous years " of the States ' assessment years 1949 50 or earlier should	 subject to the provisions of section 14(2)(c) of the Indian Income tax Act	 be assessed wholly in accordance with the States ' laws and at the States ' rates	 respectively	 appropriate to the assessment years concerned etc." really no doubt left in the matter. The Committee did not restrict the limitations they were suggesting	 to a proceeding which was actually pending on the date of repeal of the State law; it gave a wider meaning to pending proceedings that is	 "proceedings pending under and arising out of the preexisting State Acts". It is to be remembered that where an assessment starts with a notice under section 34 of the Indian Income tax Act (or corresponding section of the Cochin or Travancore Act)	 all the relevant provisions of that Act apply as effectively as where the assessment starts with a notice under section 22 (2) or corresponding section of the Cochin or Travancore Act in the ordinary course. It is also not disputed that the assessment made under section 34 in any year subsequent to the relevant assessment year must be made as if it were made in the relevant assessment year	 and the assessment must be based on the provisions of the Act as it stood in the year in which the income ought to have been assessed. Having regard to these considerations	 we find no difficulty in holding that a re assessment proceeding under section 44	 Cochin Act	 or section 47	 Travancore Act	 is a proceeding which comes under cl. (e) of the recommendations of the 782 Committee	 and must be disposed of under the preexisting State law. Section 13 (1) of the Finance Act	 1950	 gives effect to that recommendation. There is	 therefore	 nothing in the recommendations which would restrict the meaning of the expression " levy	 assessment and collection of income tax " in section 13 (1) of the Finance Act; nor do they bring section 13 (1) into conflict with articles 278 and 295 of the Constitution. We accordingly hold that there is no substance in any of the three points urged on behalf of the assessee in the Travancore Cochin appeals. Mysore Appeals. These are eight appeals and the relevant facts are these. Civil Appeals 27 to 30 of 1956 arise out of four writ petitions numbered 52 and 53 of 1953	 and 105 and 106 of 1954	 which were dealt with together in the Mysore High Court by a common judgment dated December 14	 1954. Civil Appeals 161 to 164 also arise out of four writ petitions (No. 122 of 1954 and nos. 35 to 37 of 1955) filed in the same High Court. The orders passed in those writ petitions were that they were governed by the aforesaid decision dated December 14	 1954. ln the result	 all the writ petitions were allowed with costs. In all these cases the petitioners	 who are respondents before us	 were assessed to income tax under the Mysore Income tax Act	 1923 (hereinafter called the Mysore Act) for different years previous to the integration of Mysore with India	 and the assessment proceedings were completed and closed under the Mysore Act by demand notices issued by the Income tax Officers concerned. But subsequent to the integration of Mysore	 notices under section 34 of the Mysore Act were issued against the petitioners	 and they challenged the jurisdiction of the Income tax Officers to issue such notices. Section 34 of the Mysore Act states " If for any reason	 income	 profits or gains chargeable to income tax has escaped assessment in any year	 or has been assessed at too low a rate	 the Income tax Officer may at any time within four years of the end of that year	 serve on the person liable to 783 pay tax on such income	 profits or gains	 or in the case of a company	 on the principal officer thereof	 a notice I 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 assess	 or re assess such income	 profits or gains	 and 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 the tax shall be charged at the rate at which it would have been charged	 had the income	 profits or gains	 not escaped assessment	 or full assessment	 as the case may be. " It corresponds to section 34 of the Indian Income tax Act as it stood prior to the amending Act of 1939 and the general scheme of the Mysore Act was the same as that of the Indian Income tax Act	 1922	 as it stood before 1939. The two grounds on which the jurisdiction of the Income tax Officers was challenged were (1) Under the Finance Act	 1950	 the Mysore Act stood repealed on and from April 1	 1950	 and section 13 (1) of the Finance Act kept alive the Mysore Act for the purpose of levy; assessment and collection of incometax etc. for the period mentioned therein	 but did not save section 34 of the Mysore Act for the purpose of reassessment of income tax; therefore	 the notices issued under section 34 of the Mysore Act were without jurisdiction and authority. (2) Even otherwise	 the financial agreement between the President of India and the Rajpramukh of Mysore on February 28	 1950	 which received constitutional sanctity in article 278 of the Constitution rendered the initiation of such re assessment proceedings against the respondents unconstitutional and void. The learned Chief Justice of the Mysore High Court upheld ground No. (1) and considered it unnecessary to pronounce on the second ground. Mallapa J.	 in a separate but concurring judgment expressed the view that having regard to the wording of section 13 (1) of Finance Act	 1950	 and the financial agreement of February 28	 1950	 he had no doubt that section 13 (1) did 100 784 not provide for re assessment under section 34 of the Mysore Act. The process of integration of Mysore with India was similar to. that of Travancore Cochin. The State of 	.Mysore acceded to the Dominion of India by an Instrument of Accession executed on August 9	 1947	 and accepted by the Governor General on August 16	 1947. A supplementary Instrument of Accession was executed on June 1	 1949. By a Proclamation dated November 25	 1949	 the Constitution of India to be adopted by the Constituent Assembly of India was accepted for Mysore	 and on January 26	1950	 Mysore became a Part B State within the Constitution of India. A similar financial agreement was entered into by the Rajpramukh with the President of India on February 28	 1950. On April 1	 1950	 the Finance Act	 1950	 applied the Indian Income tax Act	 1922	 to Mysore	 subject to the provisions of section 13 thereof. In dealing with the Travancore Cochin appeals	 we have fully dealt with the two grounds on which the respondent assessees in the Mysore appeals challenged the jurisdiction of the Income tax Officers concerned to issue the notices under. section 34 of The Mysore Act. Two additional points urged in support of ground No. (1) maybe stated here. It has been urged that the proviso to section 34 of the Mysore Act brings out the distinction between I assessment ' and ' re assessment '; and secondly	 it is contended that the jurisdiction under section 34 is limited to ascertainment of extra income not assessed and the section does not confer jurisdiction to make a new assessment	 for taxing whole of that assessment	 under the Act. Learned counsel for the assessees has invited our attention to In re Kashi Nath Bagla (1); Madhavjee Damodar Thackersay and Another vs Commissioner of Income Tax	 BOMBAY(2) and Anglo French Textile Co. Ltd. vs Commissioner of Income Tax	 Madras	 No. 4 (3). The real question for decision in these appeals is the true scope and effect of section 13 (1) of the Finance Act	 and on that question the additional points ' mentioned (1) A. 1. R. 1932 All. (2) (3) [1950] 18 785 above throw very little light. There is	 indeed	 a dis tinction between an original or normal assessment under section 23 and a re assessment under section 34; but we ' have shown that the word " assessment " has been used in more than one sense in Income tax law	 and( so far as section 13 (1) of the Finance Act	 1950	 is concerned	 there is no doubt that the expression I levy	 assessment and collection of income tax ' has been used in a comprehensive sense so as to include the whole procedure for imposing liability upon the taxpayer. Result : The final result	 therefore	 is (a) the TravancoreCochin appeals (Civil Appeals 143 to 145 of 1954) are dismissed with costs; and (b) the Mysore appeals (Civil Appeals 27 to 30 of 1956 and Civil Appeals 161 to 164 of 1956) are allowed and the judgment and orders of the Mysore High Court are set aside. The appellants in these Mysore appeals will be entitled to their costs in this Court and the High Court of Mysore. Appeals Nos. 143 to 145 dismissed. Appeals No. 27 to 30 and 161 to 164 allowed.

Section 13(1) of the Finance Act	 1950	 provided If immediately before the 1st day of April	 1950	 there is in force in any Part B State. any law relating to income tax or supertax or tax on profits of business	 that law shall cease to have effect except for the purposes of the levy	 assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act	 1922 for the year ending on the 31st day of March	 1951	 or for any subsequent year	 or	 as the case may be	 the levy	 assessment and collection of the tax on profits of business for any chargeable accounting period ending on or before the 31st day of March	 1949. " The appellant	 a merchant carrying on his business in the erstwhile States of Travancore and Cochin	 was assessed to income tax for the two accounting years 1122 M. E. (1946 1947) and 1123 M. E. (1947 1948) under the income tax law in force there	 namely	 the Travancore Income tax Act of 1121 M. E. and the Cochin Income tax Act of 1117 M. E. Between 1947 and 1950 there were constitutional changes resulting in the integration of the two States	 formation of the United State of Travancore and Cochin	 accession of the latter to the Dominion of India	 and finally	 its acceptance of the Constitution of India whereby it became a Part B State within the Constitution of India. The question of financial integration was considered by the Indian States Finances Enquiry Committee and on the basis of the recommendations made by it a financial agreement was entered into on February 25	 1950	 between the President of India and the Rajpramukh of the State of Travancore Cochin. By article 277 of the Constitution taxes leviable under the Travancore Income tax Act or the Cochin Income tax Act continued to be so levied until provision to the contrary was made by Parliament by law. Such provision was made by the Finance Act	 1950	 which extended the Indian Income tax Act	 1922	 to the State of Travancore Cochin	 but by section 13(1) saved certain provisions of the Travancore and Cochin Income tax Acts. In respect of the assessment for the accounting year 1124 M. E. the Income tax Officer of Ernakulam rejected the appellant 's books of account as unreliable and made a " best of judgment " assessment by his order dated January 11	 1952. On February 12	 1952	 the Income tax Officer	 Ernakulam	 issued four notices to the appellant	 two under section 44 Of the Cochin Income tax Act and two under section 47 of the Travancore Income tax Act stating therein that in consequence of definite information which had come into his possession	 he had discovered that the income of the appellant 753 for the assessment years 1123 and II24 M. E had been under assessed and that he proposed to re assess the said income ; and the appellant was asked to submit a return in respect of his total world income for the two years in question. The appellant challenged the jurisdiction of the Income tax Officer to re assess his income and contended (1) that the assessment order dated January 11	 1952	 made by the Income tax Officer for the accounting year 1124 M. E. being the only document on which the Income tax Officer relied for issuing a notice to the appellant	 the requisite conditions for the application of the statutory provisions were lacking	 (2) that section 13(1) of the Finance Act	 1950	 did not have the effect of saving the provisions of the Travancore Income tax Act or the Cochin Income tax Act for the purpose of re assessment of income tax	 and (3) that the financial agreement made between the President of India and the Raj pramukh dated February 25	 1950	 which received constitu tional sanctity in article 278 of the Constitution	 rendered the initiation of such re assessment proceedings unconstitutional and void : Held	 (1) that though the meaning of the phrase " definite information " in section 44 (1) Of the Cochin Income tax Act and section 47(1) Of the Travancore Income tax Act	 must depend on the circumstances of each case	 there must be a casual connection between the information and the discovery	 referred to in the sections ; but discovery does not mean a conclusion of certainty at the stage of notice ; it is enough if the Income tax Officer forms an honest belief. Accordingly	 the assessment order dated January 11	 1952	 which disclosed a definite and systematic pattern of transactions for avoidance of tax not only in respect of the year covered by the order but spread over years anterior to it	 amounted to information which	 if honestly believed	 would reasonably support the opinion of the Income tax Officer that there was a discovery of " escaped " income	 etc.	 within the meaning of the sections ; Firm jitanyam Niymalram vs Commissioner of Income tax	 A. 1. R. 1952 Pat. 163	 approved. (2)that the expression " levy	 assessment and collection of income tax " in section 13(1) Of the Finance Act	 1950	 was wide enough to comprehend re assessment proceedings under section 47 of the Travancore Income tax Act and section 44 Of the Cochin Income tax Act; Commissioner of Income tax	 Bombay Presidency and Aden vs Khemchand Ramdas	 (1938) L. R. 65 1. A. 236	 explained. Firm L. Hazari Mal vs Income tax Officer	 Ambala	 A. 1. R. 1957 Punjab 5	 approved. (3)that on a true construction of the recommendations of the Indian States Finances Enquiry Committee	 the financial 754 agreement between the President of India and the Rajpramukh did not render the impugned proceedings unconstitutional or void. In the connected appeals	 the respondents who were merchants doing business in the State of Mysore	 were assessed to income tax under the Mysore Income tax Act	 1923	 for the years prior to the integration of Mysore with India. But subsequent to the integration of Mysore notices under section 34 Of the Mysore Income tax Act were issued against them for re assessment of income tax for the years prior to the integration. The respondents contended that the Income tax Officer had no jurisdiction to issue such notices on the grounds (1) that under the Finance Act	 1950	 the Mysore Income tax Act	 1923	 stood repealed on and from April 1	 1950	 and section 13(1) of the former Act kept alive the Mysore Act for the purpose of levy	 assessment and collection of income tax	 etc.	 for the period mentioned therein	 but did not save section 34 Of the Mysore Income tax Act for the purpose of re assessment of income tax and	 therefore	 the notices issued under section 34 were without jurisdiction and authority	 (2) that the financial agreement between the President of India and the Rajpramukh of Mysore	 dated February 28	 1950	 rendered the initiation of such re assessment proceedings unconstitutional and void	 and (3) that the jurisdiction under section 34 Of the Mysore Income tax Act was limited to ascertainment of extra income not assessed and the section did not confer jurisdiction to make a new assessment under the Act. Held	 (1) that the Finance Act	 1950	 empowered the Income tax Officer to take proceedings under section 34 Of the Mysore Income tax Act	 for re assessment	 for the prior years	 of the under estimated or escaped income; (2)that the financial agreement dated February 28	 1950	 did not render the proceedings for re assessment	 unconstitu tional or void; and (3)that though there was a distinction between an original or normal assessment under section 23 and a re assessment under section 34 of the Mysore Income tax Act	 the expression " levy	 assessment and collection of income tax " in section 13(1) of the Finance Act	 1950	 had been used in a comprehensive sense so as to include the whole procedure for imposing liability upon the assessee.