In response to  show cause notice u/s 263 the assessee has brought to notice of PCIT that no disallowance could be made under section 40(a)(ia) even if there was a violation under section 194C(7). The PCIT set aside the assessment order.  On appeal the Tribunal held that PCIT could not have set aside assessment order under section 263 without meeting assessee’s objections legally. Order PCIT was held to be unsustainable in law.  (AY. 2014-15)