Appellate enhancement power permits suo motu adjustment of assessment, subject to prior hearing before any increase.

Section 31(5) of the Tamil Nadu Agricultural Income-tax Act, 1955 empowers the Appellate Assistant Commissioner, while disposing of an appeal against an assessment, to confirm, reduce, enhance or annul the assessment, including enhancement on his own initiative, provided the assessee is given a reasonable opportunity of being heard before enhancement. The appellate power forms part of the assessment process and is not confined to matters raised by the appellant. The Tribunal's reliance on a decision concerning the Appellate Tribunal's powers was inapposite because it did not limit the distinct statutory authority of the Appellate Assistant Commissioner.

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Issues: Whether the Appellate Assistant Commissioner had power under section 31(5) of the Tamil Nadu Agricultural Income-tax Act, 1955 to enhance the assessment suo motu.

Analysis: Section 31(5) empowers the Appellate Assistant Commissioner, while disposing of an appeal against an assessment, to confirm, reduce, enhance or annul the assessment, subject to giving the assessee a reasonable opportunity of being heard before enhancement. The appellate power in taxing statutes is part of the assessment process, and the authority may act on its own initiative to adjust the assessment in accordance with law. The decision relied on by the Tribunal dealt with the powers of the Appellate Tribunal and did not restrict the distinct statutory power of the Appellate Assistant Commissioner under section 31(5).

Conclusion: The Appellate Assistant Commissioner had the power to enhance the assessment suo motu; the contrary view of the Tribunal was unsustainable.

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