Approval under Section 35(1)(ii) imposes accounting, audit certificate and reporting conditions for research-funded institutions annually. Approval under Section 35(1)(ii) is granted to the Institute subject to maintaining separate research accounts, submitting audited Income & Expenditure accounts for each approved financial year to the tax exemption authority by the due filing date or within the specified notice period, and providing an auditor's certificate specifying amounts received for research eligible for donor deduction and certifying that the expenditure was for scientific research.