TMI Blog2023 (5) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... rger in such a case will have no application. Each case is required to be considered on its own facts. It would not be correct to contend that only because a proceeding for rectification was initiated subsequently, the revisional jurisdiction could not have been invoked under any circumstances whatsoever. If such a proceeding was initiated, in our opinion, the contesting parties could bring the same to the notice of the Commissioner so as to enable him to take into consideration the subsequent events also. It goes without saying that if and when the Commissioner of Income-tax takes up for consideration a subsequent event, the assessee would be entitled to make its submission also in regard thereto. This decision would have precedence over all the other decisions as cited by Ld. AR. Therefore, we reject this plea raised by Ld. AR. We find that during the course of original assessment proceeding, a notice u/s 142(1) was issued to the assessee calling for requisite details from the assessee. The same include Copies of Audit Report and financial statements of previous 3 years. The assessee was also directed to explain the reasons for large cash deposit during demonetization pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in invoking provisions of Sec.263 disregarding the pendency of notice already issued by the learned Assessing Officer under Section 154 of the Act on 10-4-2021 on the above very same 5 issues [status of which is still 'open'].Since there is absolutely no material difference on issues sought to be considered under these notices, SCN issued under section 263 lacked very basis for assumption of jurisdiction by Pr.CIT. 1.3 The only CASS reason being: cash deposit during demonetization period, Learned Pr.CIT failed to note that AO cannot travel beyond the mandate of verifying such cash deposit only and in the absence of any approval by Pr.CIT to look into other- issues also, he erred in holding that the impugned order is erroneous and prejudicial to the interest of revenue. WITHOUT PREJUDICE: 2.1 Learned Pr.CIT failed to note that appellant, during the course of asst. proceedings, on 22/11/19 8/12/2019, had already filed all details in respect of the above 5 issues and hence the impugned order is not erroneous and prejudicial to the interests of Revenue 2.2 Learned Pr.CIT erred in holding that the amount deposited in SBN [specified bank notes] is not a legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest expenditure. The assessee maintained zero balance for 6 months in AY 2015-16. Since the assessee maintained huge cash balance, interest expenditure was to be disallowed. The Ld. AO failed to verify this aspect; (iii) The assessee claimed Audit fees for which Ld. AO failed to examine the TDS compliance u/s 40(a)(ia); (iv) The assessee paid bonus to staff and customers. The bonus paid to customer is not allowable and the same is required to be disallowed. The Ld. AO failed to verify the same. The Ld. Pr. CIT held that the assessment order was passed without examining the above issues which shows lack of enquiry and nonapplication of mind by Ld. AO. Accordingly, the assessee was put to show cause notice. 3.3 The assessee assailed the revision and filed a reply which has been extracted in the impugned order. Regarding excessive salary to Asstt. Manager and Manager, it was submitted that both employees were playing vital and managerial role in running the business and to carry out day-to-day operations, The salary was paid based on their skills. The salaries so paid has already been offered to tax by them in their respective tax returns. The assessee submitted that due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 263 is exercised by a higher authority. It is a special provision. The revisional jurisdiction is vested in the Commissioner. An order thereunder can be passed if it is found that the order of assessment is prejudicial to the Revenue. In such a proceeding, he may not only pass an appropriate order in exercise of the said jurisdiction but in order to enable him to do it, he may make such inquiry as he deems necessary in this behalf. When an order is passed by a higher authority, the lower authority is bound thereby keeping in view the principles of judicial discipline. An order of assessment is subject to exercise of an order of a revisional jurisdiction under section 263 of the Act. Doctrine of Merger in such a case will have no application. The Hon ble Court further opined that initiation of a proceeding under Section 263 of the Act cannot be held to have become bad in law only because an order of rectification was passed. No such hard and fast rule could be laid down, in this regard. Each case is required to be considered on its own facts. It would not be correct to contend that only because a proceeding for rectification was initiated subsequently, the revisional jurisdiction ..... 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