Prior notice for assessment enhancement remains mandatory; general appellate scrutiny cannot replace a specific opportunity to show cause.

Prior notice is mandatory before the Commissioner (Appeals) enhances an assessment. Section 251(2) requires a reasonable opportunity to show cause against the specific proposed enhancement; general scrutiny of ledger accounts or participation in appellate proceedings does not replace explicit notice. Without such notice, the assessee is denied the statutory opportunity to contest the enhanced disallowance. The stated conclusion is that enhancement without prior notice is impermissible.

---

---

Issues: Whether the Commissioner (Appeals) could enhance the disallowance without issuing prior notice to the assessee.

Analysis: Section 251(2) requires the Commissioner (Appeals) to afford a reasonable opportunity to show cause before enhancing an assessment. A general examination of ledger accounts or the assessee's appearance in appellate proceedings does not substitute an explicit notice communicating the proposed enhancement. In the absence of such notice, the assessee was denied the statutory opportunity to defend against the enhanced disallowance.

Conclusion: The Commissioner (Appeals) could not enhance the disallowance without prior notice to the assessee; the issue was decided in favour of the assessee.

---