Assessing Officer made disallowance on account of privilege fee paid by assessee to State Government under section 43B of the Act. During pendency of appeal filed by assessee before Commissioner (Appeals), a notice under section 263 was issued by Commissioner on ground that leave salary contribution and electricity charges paid by assessee were allowed as deduction by Assessing Officer without any examination CIT (A) without examining appeal preferred by assessee regarding disallowance of privilege fee dismissed same as being infructuous. Order of CIT (A) affirmed by the Tribunal. On appeal  High Court held that Commissioner (Appeals) ought to have adjudicated appeal on merits regarding disallowance of privilege fee under section 43B and, accordingly, impugned order passed by Commissioner (Appeals) was to be quashed and matter was to be remanded back to him  to decide accordance with law. (AY. 2004-05)