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Issues:
Challenge to order under section 263 of the IT Act for assessment year 1978-79 based on lack of fresh information, reliance on audit objection, interest discrepancy, jurisdictional error, and lack of prejudice to revenue. Analysis: The appellant challenged the order under section 263 of the IT Act for the assessment year 1978-79 on various grounds. Firstly, it was contended that the order lacked fresh "information" to set aside the assessment under section 143(3). Secondly, the appellant argued that the order was influenced more by an Audit Objection than the assessing officer's own judgment, citing a precedent. Thirdly, the discrepancy in interest rates paid and received was raised, with the appellant asserting that the addition of 6% as fresh material for action under section 263(1) was unfounded based on facts and previous findings. Fourthly, the appellant claimed that the order was without jurisdiction, as the assessing officer's order had already merged with the order of the ld. CIT (Appeals), supported by a relevant decision. Lastly, it was argued that there was no prejudice to the revenue and no merit for disallowance of certain interest payments, emphasizing the lack of grounds for action under section 263(1). The ld. CIT initiated proceedings under section 263 of the IT Act after finding the assessment order to be erroneous and prejudicial to the revenue's interest. The ld. CIT set aside the assessment order after considering the case records and the appellant's submissions, deeming the order erroneous and prejudicial to revenue. The appellant contended that there was no error in the assessment order and criticized the ld. CIT for assuming jurisdiction under section 263 without justification. The appellant also argued that the assessment order had merged with the order of the ld. CIT (Appeals), rendering the ld. CIT's subsequent order invalid. On the respondent revenue's behalf, reliance was placed on the impugned order, but the appellant referenced a relevant case to support the argument that the ld. CIT lacked jurisdiction to revise the assessment order after it had merged with the order of the ld. CIT (Appeals). The Tribunal concluded that the ld. CIT was not competent to undertake the revision proceedings under section 263, as the assessment order had merged with the order of the ld. CIT (Appeals). Citing a relevant case precedent, the Tribunal held that the ld. CIT lost jurisdiction to revise the assessment order once it had merged with the appellate order. Consequently, the impugned order was cancelled, and the assessee's appeal was allowed.
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