TaxTMI 
TaxTMI 
2012 (11) TMI 498
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....he assessee has failed to comply with conditions specified U/s 80IB(8A)(iv) of the I.T. Act 1961 read along with Rule 18DA(2)(a) of the I.T. Rules. 3. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in not considering that the assessee has defaulted in its obligation to take prior permission of the prescribed authority to sell its services as required under Rule 18DA(2)(a)." 2. At the time of hearing before us, it is stated by the learned DR that the assessee company is engaged in scientific research and development and provide the services of bio-equivalence of international standards to pharmaceutical companies. During the year under consideration, the assessee claimed deduction under Sect....
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....the assessee company is approved by such prescribed authority vide order dated 30th March, 2007 for AY 2007-08, 2008-09 & 2009-10. That such approval is further extended vide order dated 30th June, 2009 for AY 2010-11, 2011-12 & 2012-13. That whether there is a violation of any clause of Rule 18DA is to be looked into by the prescribed authority before extending the approval. Had there been any violation, the approval to the assessee would not have been extended by the prescribed authority. That in AY 2009-10, the Assessing Officer himself, vide order dated 7th December, 2011 passed under Section 143(3), has granted approval under Section 80IB. That such approval is duly granted after considering Rule 18DA of the IT Rules. Thus, the departm....
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.... the assessee, it is not in dispute that it is a company which is registered in India. It has main object of scientific and industrial research and development and it is approved by the prescribed authority. The only dispute by the Revenue is that it has not fulfilled the conditions as prescribed by Rule 18DA of the I.T. Rules. The said Rule 18DA reads as under:- "Prescribed conditions for deduction under sub-section (8A) of section 80-IB. 18DA. (1) Any company carrying on scientific research and development shall be eligible for deduction specified in sub-section (8A) of section 80-IB, if such company- (a) is registered in India; (b) has its main object the scientific and industrial research and developm....
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....ent projects. (3) If, at any stage, it is found that- (a) the approval granted to the company referred to in sub-rule (2) of rule 18D is to avoid payment of taxes by its group companies or companies related to its directors or majority of its shareholders; (b) any provisions of the Act or the rules have been violated, the prescribed authority specified may withdraw the approval so granted. (4) Every company referred to in sub-rule (1) shall make an application to the prescribed authority for the purposes of obtaining approval. (5) Every application referred to in sub-rule (4) shall be accompanied by- (a) memorandum of association and articles of association incorporating all amendments duly certified b....
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....roval. In the case of the assessee, the prescribed authority has not withdrawn the approval of the assessee for the assessment year under consideration i.e. 2007-08 but has further granted the extension of the approval vide order dated 30th June, 2009 for a further period of three years. Moreover, the Assessing Officer himself in the subsequent year i.e. 2009-10 in the order passed under Section 143(3) has discussed at length Section 80IB(8A) & Rule 18DA(1) and has finally concluded that the assessee is entitled to deduction under Section 80IB(8A). The relevant finding of the Assessing Officer reads as under:- "8. Reply/submission of the assessee has been considered and on going through the above reply of the assessee, it is found that t....