2004 (6) TMI 27

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....al was correct in holding that the Appellate Assistant Commissioner has no power to enhance the assessment suo motu under section 31(5) of the Tamil Nadu Agricultural Income-tax Act (hereinafter referred to as the "Act"). The brief facts are that in the assessment made by the Agricultural Income-tax Officer certain expenditure as claimed by the assessee was allowed and certain expenditure was disallowed and as against the disallowance, an appeal was preferred before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner found that certain expenditure allowed by the Agricultural Income-tax Officer was not correct. Accordingly, after issuing notice under section 31(5) of the Act, he enhanced the assessment by disallowing ....

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....int that arises for consideration is whether the Appellate Assistant Commissioner has power of enhancement of assessment suo motu under section 31(5) of the Act. Under section 31 of the Act, an assessee is given a statutory right to prefer an appeal before the Assistant Commissioner against the order of assessment made by the Agricultural Income-tax Officer. The powers of the Appellate Assistant Commissioner in disposing of the appeal are set out in sub-section (5) of section 31 of the Act and the said section reads as under: "31. Appeal against assessment.-. . . (5) In disposing of an appeal, the Assistant Commissioner may - (a) in the case of an order of assessment- (i) confirm, reduce, enhance or annul the assessment; (ii) set aside....

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....ugan and Co.'s case [1982] 51 STC 381) that the appellate authority in an appeal is very much committed to the assessment process and he can himself enter the arena of assessment, either by pursuing further investigation or causing further investigation on his own initiative, and enhance the assessment. The Full Bench of this court in Arulmurugan and Co.'s case [1982] 51 STC 381, while dealing with the powers of the Appellate Assistant Commissioner under the Tamil Nadu General Sales Tax Act held as under: "An appellate authority under taxing enactments sits in appeal, only in a manner of speaking. What it does, functionally, is only to adjust the assessment of the appellant in accordance with the facts on record and in accordance with the ....

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....d exceptional attributes of the jurisdiction of a tax appellate authority. Those attributes underline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself." We are of the view that the ratio laid down by this court in Arulmurugan and Co.'s case [1982] 51 STC 381 [FB] would squarely apply in respect of the powers of the Appellate Assistant Commissioner under the Tamil Nadu Agricultural Income-tax Act as well. We are also of the view that the Tribunal has failed to note that the decision of this court in State of Tamil Nadu v. P.T. Marimuthu Chettiar [1984] 55 STC 253 has no application in respect of the powers of the Appellate Assistant Commissioner. This court in P.T. ....