Re: Appeal- Notice of enhancement .

An order is passed by the authorities in pursuance of a declaration filed by the assessee under the scheme to settle a dispute in appeal before the Commissioner(Appeals) demanding that the assessee inter alia pays tax on the income for which a notice of enhancement was issued by the Commissioner(Appeals) as per the Proviso to s. 2(j). It is the case of the assessee that no such notice is received by him by the specified date.

Clause (j) o f s. 2 defines the term ‘disputed tax’ . The proviso to the clause has the effect of expanding the scope of the disputed tax . It states that the disputed tax shall be increased by the amount of tax pertaining to the  issues for which notice of enhancement has been issued u/s 251 by the Commissioner(Appeals) before the specified date. It is clear that the law requires that a notice should not only be issued but should have been issued on or before the specified date. In the facts of the case, the assessee claims that no such notice was issued. The authorities will have to refute the charge by proving that the notice was not only issued but was issued by the specified date, failing which the assessee would be in his right to pay only such disputed tax that excludes the tax on the issue under the alleged notice of enhancement. Secondly, the courts have been holding that for a valid notice , it is essential to establish that such notice was served within the prescribed time or at least within a reasonable time. It is therefore required to establish a valid service of notice by the specified date or within a reasonable time thereafter, say first week  of the next month. 

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