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2016 (3) TMI 273 - AT - Income TaxRevision u/s 263 - failure to apply provisions of Sec.14A of Rule 8D by AO - Assessee has raised additional grounds that the matter is a subject matter of appeal before CIT and that the CIT cannot exercise jurisdiction u/s.263 - Held that:- Though Rule 8D came into effect from 24.03.2008 and non applicability of provisions is erroneous and omitted by the Assessing Officer and it is prejudicial to the interest of the Revenue and we do not find any merits in the argument of the ld. Authorised Representative as order under Sec.263 is bad in law. We are of the opinion that the argument of the ld. Authorised Representative is not correct where the notice u/s.263 was issued with reference to Rule 8D further doctrine of merger cannot be applied on this issue as the issue before CIT is with regard to disallowance u/s.14A and not relating to Rule 8D which is applicable from 2008- 2009 onwards. Further CIT can suo-motU initiated proceedings were Assessing Officer takes a wrong decision without considering the material on record or he takes a decision without making a enquiry into matters, where such enquiry prime facie warranted. In the present case, the Assessing Officer has to consider the provisions applicable under Rule 8D effective from assessment year 2008-09. But the Assessing Officer made disallowance by following Co-ordinate Bench decision for earlier assessment year. It is apparent from facts and circumstances the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue and accordingly we uphold the order of CIT - Decided against assessee
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