THE COMMISSIONER OF INCOME-TAX vs SHAPOORJI PALLONJI MISTRY

The Supreme Court held that the Appellate Assistant Commissioner lacks the authority to enhance an assessment by discovering new sources of income not previously considered by the Income Tax Officer, as per Sections 31(3)(a), 33B, and 34 of the Indian Income Tax Act, 1922. The Court emphasized that the enhancement of assessment must follow the established procedure for escaped income, ensuring the assessee's right to appeal is preserved. The High Court's ruling that the Appellate Assistant Commissioner was not competent to enhance the assessment was upheld.