TaxTMI 
TaxTMI 
2010 (4) TMI 48
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....etitioner has sought the quashing of the impugned order dated 15.06.2009, wherein the approval under Section 35(2AB) of the Income-tax Act, 1961 (hereinafter referred to as "the said Act") is indicated to have been given with effect from 01.04.2007 as against from 01.04.2004 which the petitioner was seeking. 2. As aforesaid, the impugned order dated 15.06.2009 has been passed in the context of the provisions of Section 35(2AB) of the said Act. The said Section 35(2AB), as was applicable during the relevant period, reads as under:- "35. Expenditure on scientific research.- xxxx xxxx xxxx xxxx xxxx (2AB) - (1) Where a company engaged in the business of [bio-technology or in] "any business of manufacture or production of any articl....
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....he case are that by a letter dated 17.09.2001, upon an application for renewal of recognition of the petitioner's in-house Research and Development units at Perambra, Distt-Trichur beyond 31.03.2001 as also recognition of the Research and Development Centre at Limda village, Distt-Baroda (Gujarat), the Government of India through the Ministry of Science and Technology informed the petitioner that it had been decided to accord renewal of the recognition of the in-house Research and Development unit at Perambra as also to grant recognition of the in-house Research and Development unit at village Limda upto 31.03.2004. Thereafter, upon a similar renewal of the recognition of the in-house Research and Development units being sought, the Governm....
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....rnished by a company under sub-Section (2AB) of the said Section 35 shall be in Form No. 3CK. 4. Form 3 CK is entitled:- "Application form for entering into an agreement with the Department of Scientific and Industrial Research for cooperation in In-house Research and Development facility and for audit of accounts maintained for that facility." The said form comprises of two parts. Part "A" contains the particulars of the applicant, such as, name and address, permanent account number, business activities, the annual production, annual expenditure on scientific research, etc. Part "B" comprises of the agreement which is to be entered into between the petitioner and the Department of Scientific and Industrial Research. We may point o....
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....n approved for the purposes of Section 35(2AB) from 01.04.2007 to 31.03.2010. However, such approval is subject to the condition underlined therein as also to the condition that approval for the financial year 2007-08 is recommended only for the purposes of claiming weighted tax deduction on capital expenditure on R&D equipment. 6. The learned counsel for the petitioner submitted that when approval of the in-house Research and Development facilities had been granted right upto 31.03.2010, there was no occasion for the respondent and, in particular, the prescribed authority, being the Secretary, Department of Scientific and Industrial Research, to limit the approval to one which would operate only with effect from 01.04.2007. The petition....
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....in the financial year preceding the year in which the firm applied to prescribed authority for the approval - such capital expenditure incurred in the said preceding year provided the company had claimed such capital expenditure in their I.T. returns for concerned assessment year." 8. From the aforesaid two provisions of the said guidelines, it was pointed out by Mr Chandhiok that, in the first instance, the approval to in-house research and development centres having valid recognition by the Department of Scientific and Industrial Research, would, as a normal rule, be considered from the first of April of the year in which the application is made in Form 3CK. He submitted that in the present case, the application in Form 3CK was made on....
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....e a company is entitled for deduction under the said sub-section (1), it must also enter into an agreement with the prescribed authority for co-operation in such research and development facility and for audit of accounts maintained for that facility. This is specifically stipulated in clause (3) of Section 35(2AB) of the said Act. We find that the agreement was entered into only on 21.08.2008 when the petitioner made the application in Form 3CK. We have already mentioned that part "B" of the said form comprises of the said agreement. Such an agreement is a condition precedent to the kind of approval, for the purposes of deduction, which the petitioner is seeking. This condition was only met on 21.08.2008. Therefore, the petitioner's plea t....