Tribunal upholds CBDT decision denying tax exemption, based on lack of scientific research activity.

The Tribunal upheld the decision of the Commissioner of Income-tax, confirming the assessment order determining the total income of the assessee at Rs. 92,04,200 against the returned income of Nil. The assessee's claim for exemption under section 35(1)(ii) of the Income Tax Act was rejected by the CBDT due to insufficient scientific research activity, leading to the dismissal of the appeal. The Tribunal relied on the High Court's precedent, affirming the authority of the CBDT in such cases, ultimately upholding the rejection of the assessee's claim for exemption.

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Issues:
1. Justification of confirming the assessment order determining the total income of the assessee against the returned income.

Analysis:
The appeal was filed against the order of the Commissioner of Income-tax, Jalpaiguri for the assessment year 2009-10. The main issue revolved around the confirmation of the assessment order determining the total income of the assessee at Rs. 92,04,200 against the returned income of Nil. The Assessing Officer (AO) treated the assessee as an 'AOP' after the application for renewal of approval u/s. 35(1)(ii) was rejected by the Central Board of Direct Taxes (CBDT). The assessee contended that it was involved in various research activities and should have been granted exemption under the IT Act. However, the CIT-A rejected the claim due to the absence of approval u/s. 35(1)(ii) of the Act. The Tribunal upheld the decision, stating that the CBDT rejected the application based on inadequate scientific research activity, making the assessee ineligible for exemption. The Tribunal also highlighted that the High Court of Calcutta had previously ruled on the matter, affirming the authority of the CBDT in such cases. Consequently, the Tribunal dismissed the appeal, affirming the decision of the CIT-A in rejecting the claim of the assessee for exemption u/s. 35(1)(ii) of the Act.

In conclusion, the Tribunal's decision was based on the lack of approval for exemption u/s. 35(1)(ii) of the Act, as the CBDT had rejected the application due to insufficient scientific research activity. The Tribunal also cited the High Court's ruling, confirming the authority of the CBDT in such matters. Therefore, the appeal was dismissed, upholding the decision of the CIT-A to reject the assessee's claim for exemption.

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