AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 311
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....g in his Order that 2 "The issue whether the appellant was eligible for deduction u/s 35(1)2AB or not was decided by the A.O. during the proceedings u/s 143(3) and as such this issue can be considered in appellate proceedings for appeal filed against order u/s 143(3) only. This issue cannot be considered in the present appeal. The appeal filed by the appellant is accordingly dismissed. " Note: Our appeal had been filed u/s 154 as the initial order of the AO u/s 143(3) had been amended subsequently by a revised order u/s 154. 2. At the outset, it is humbly put on record that there is no dispute to the fact that expenditure of Rs. 1,29,58,182/- was incurred by this company towards its DSIR (Department of Scientific & Industrial Research, Ministry of Science & Technology) recognized R&D facility as the Assessing Officer (AO) has allowed 100% of the said amount as deduction vis his order issued u/s 154, that modifies the AO's initial assessment order issued u/s 143(3). The only reason for which AO had disallowed claim of weighted deduction of 200% of the R&D expenditure is that there was no approval in Form 3CM from DSIR, Ministry of Science & Technology at the ti....
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....o a small scale company (MSME), that has been given approval u/s 35 (2AB) in Form 3CM for its R&D facility. Prayer 1- 6. Based on the facts and in the circumstances of the case, the law and the case law, we appeal that the learned Commissioner of Income-tax (Appeals), Gurgaon, erred in dismissing our subject Appeal merely on technical grounds without fully evaluating the facts on record pertaining to the circumstances of our case or the issue that was the subject matter of our appeal i.e. the eligibility for weighted deduction of the expenses of our R&D facility u/s 35(1)2AB. We humbly wish to point out that the Appeal filed by us u/s 154 instead of u/s 143(3) is a curable defect, which in no way alters the facts on record or the merit of our appeal. As such, the learned Commissioner of Income-tax (Appeals), Gurgaon should have taken this defect on record as 'a mistake apparent from the records' and passed orders on our appeal based on the fact that he took the changed circumstance and additional evidence on record pertaining to the approval our R&D facility in Form 3CM by DSIR u/s 35(1)2AB during the period of pendency of our Appeal with him. A letter for rec....
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....at "The defect in filing the appeal is a curable defect and in view of the provisions of section 292B of the I.T, Act, 1961, no proceedings shall be deemed to be invalid merely by reason of any mistake, defect or omission in the same, if such proceeding is in substance and in effect in conformity with or according to the intent and purpose of the Act. Prayer 2: 7. Based on the sanction from DSIR in Form 3CM u/s 35(AB) for the period 01.04.2015 to 31.03.2017 that has been received by us, various facts and in the circumstances of the case, the law and the case law, we appeal that we are entitled to the claim of weighted deduction of 200% of the R&D expenditure incurred by us during the entire period, beginning AY 2012-13, for which we have had the recognition and approval of DSIR for our in-house R&D facility. Each of the year, beginning AY 2012-13, our duly recognized R&D facility has been audited, audit reports submitted to DSIR and we have throughout fulfilled all the eligibility criteria for approval u/s 35(2AB) to DSIR, Ministry of Science & Technology as per the laid down guidelines and rules. 8. As an innovation and R&D focused small-scale enterprise....
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....red on R & D on the premise that the expenses to the tune of Rs. 1,29,58,182/- stood already disallowed by assessee itself for claiming the weighted deduction under section 35(2AB). The appellant preferred an appeal before the ld. CIT(A) against the order u/s. 154, which was dismissed by the first appellate authority observing as under : 7 "3.3 I have carefully considered the appellant's submissions. The appeal filed by the by the appellant as per Form 35 is against order u/s 154 dated 06.07.2015 and not against the order u/s 143(3) dated 17.03.2015. The limited issue for consideration before the A.O in the proceedings u/s 154 was a computation error in as much as there was a double disallowance of Rs. 1,29,58,182/-, once by the appellant himself and once again by the A.O. This mistake was duly corrected by the A.O vide order u/s 154. There was thus no mistake in the order u/s 154 which require any intervention at this stage. The issue whether the appellant was eligible for deduction u/s 35(1 )2AB or not was decided by the A.O during the proceedings u/s 143(3) and as such this issue can be considered in appellate proceedings for appeal filed against order u/s 143(3) on....
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....the appeal. 13/09/2015. The Assessee submited a letter to CIT(A) for rectification of mistake. 21/09/2015. We file an amended memo of appeal rectifying the mistake regarding applicability of section 143(3) vs section 154 23/09/2015 the Order of the CIT(A), Gurgaon, on our Appeal is received at our office. It bears the order date as 06.09.2015 and dispatch date as 20.09.2015. While the order on the appeal is passed so hurriedly the very next day of the hearing, why was the order dispatched after two weeks. This is injudicious on part of 9 CIT(A). The learned Commissioner of Income-tax (Appeals), Gurgaon should have had the defect regarding the applicability of sec 143(3) vs 154 taken as 'a mistake apparent from the records' and passed orders on our appeal since he took the changed circumstance and additional evidence on record pertaining to the approval our R&D facility in Form 3CM by DSIR u/s 35 (2AB) during the period of pendency of our Appeal with him. It is pertinent to note the CIT(A) has not contested to the substance of the matter that is allowance u/s 35 (2AB), it is strongly assumed that he was convinced with the merit of the case. ....