AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 844
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....draw any of the grounds of appeal on or before of the final hearing of appeal Total tax effect (see note below) Rs. 6,13,355/-" Ground No. 1 ( CIT(A) erred in law in confirming addition of Rs. 18.93 lakhs u/s. 35(2AB) of the Act 3. The brief facts of the case are that during the course of the course of assessment proceedings, the assessee claimed deduction u/s. 35(2AB) of Rs. 62,55,749/- *2 = 1,25,11,498/-. The Assessing Officer asked the assessee to provide copy of form 3CL certificate highlighting the approved quantum of deduction u/s. 35(2AB) for its claim of 200% deduction. However, the assessee could not submit the same during the course of assessment proceedings. Accordingly, the Assessing Officer disallowed 100% expenditure claimed in the computation amounting to Rs. 62,55,749/- u/s. 35(2AB) of the Act. The assessee filed appeal before CIT(A) and submitted Form 3CL before CIT(A). The assessee submitted that the reason for non-filing of form 3CL was that same was lying with the accountant of the assessee, but he had to leave on urgent basis due the causality in the family. Accordingly, form 3CL could not be submitted during the course of appellate proceedings. ....
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....taxmann.com 576 (Pune - Trib.) made the following relevant observations on the quantum of deduction allowable u/s 35(2AB) of the Act, while deciding the issue on identical facts in favour of the assessee: "Clause (b) to sub-rule (7A) has been substituted by IT (Tenth Amendment) Rules, 2016 w.e.f. 01.07.2016, under which the prescribed authority has to furnish electronically its report (i) in relation to approval of in-house R & D facility in part A of form No.3CL and (ii) quantifying the expenditure incurred on in-house R & D facility by the company during the previous year and eligible for weighted deduction under sub-section 2AB of section 35 of the Act in part B of form No.3CL. In other words the quantification of expenditure has been prescribed vide IT (Tenth Amendment) Rules, 2016 w.e.f. 01.07.2016. Prior to this amendment, no such power was with DSIR i.e. after approval of facility. Under the amended provisions, beside maintaining separate accounts of R & D facility, copy of audited accounts have to be submitted to the prescribed authority. These amendments to rules 6 and 7a are w.e.f. 01.07.2016 i.e. under the amended rules, the prescribed authority as in p....
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....e followed by the prescribed authority. Prior to the aforesaid amendment in 2016, no such procedure/methodology was prescribed. In the absence of the same, there is no merit in the order of Assessing Officer in curtailing the expenditure and consequent weighted deduction claim under section 35(2AB) of the Act. The case before us pertains to FY 2013-14 relevant to AY 2014-15 and therefore, facts and circumstances are absolutely identical in assessee's case also. Therefore, respectfully, following the order of the Tribunal (supra.) on the same parity of reasoning and under same set of facts and circumstances, we find no reason to interfere with the findings of the Ld. CIT(Appeal) and relief provided to the assessee is hereby sustained. Thus, grounds raised by the Revenue are dismissed." 4.3 The Kolkota Tribunal in recent case of DCIT v. STP Ltd.[2021] 125 taxmann.com 97 (Kolkata - Trib.) held that prior to 1-6-2016, only requirement to claim deduction under section 35(2AB) was to receive recognition from prescribed authority since said recognition was obtained by assessee on 26-3-2013, deduction could not be denied merely because prescribed authority failed to send intimation in F....
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....e following observations: "From a plain of clause (b) of section 43B of the Act it is very clear that is no mention about the employee's contribution to PF/ESIC. It is a law that provisions always prevail over general provisions. As stated above, section 43B of the Act does not mention the employee's contribution to PF/ESI which is specifically covered by section 36(1)(va) of the Act and in the circumstances, the assessee was under obligation to the employee's contribution of PF/ESIC within due date failing which, the provisions of 36(1)(va) of the Act are attracted. Apart from the above, the Hon'ble Gujarat High Court held in the case of CIT Vs. Gujarat State Road Transport Corporation in ITA No. 637 of 2013 that with to the sum received by the assessee from any of his employees to which provision of Sub-clause (x) of clause (24) of Section (2) apply, the assessee shall be entitled to deduction of amount in computing the income referred to in section 28 if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the 'due date'. In view of the above, late payment of employees contribution....
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....ferred to in section 28 of that previous year in which such sum is actually paid by him. It appears that prior to the amendment of section 43B of the Act vide Finance Act, 2003, an assessee was entitled to deductions with respect to the sum paid by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees (employer's contribution) provided such sum - employer's contribution is actually paid by the assessee on or before the due date applicable in his case for furnishing return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with such return. It also further provided that no deduction shall, in respect of any sum referred to in clause (B) i.e. with respect to the employer's contribution, be allowed unless such sum is actually been paid in cash or by issue of cheque or draft or by any other mode on or before the due date as defined in explanation below clause (va) of sub-section (1) of section 36 and where such sum has b....
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.... employer's contribution Second Proviso to section 438 which provided that even with respect to employers' contribution [(section 43(B)b], assessee was required to credit amount in the relevant fund under the PF Act or any other fund for the welfare of the employees on or before the due date under the relevant Act, is deleted, it cannot be said that section 36(1)(va) is also amended and/or explanation to section 36(1)(va) has been deleted and/or amended. It is also required to be noted at this stage that as per the definition of "income" as per section 2(24) (x), any sum received by the assessee from his employees as contribution to any Provident Fund or Superannuation Fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of the such employees is to be treated as income and on fulfilling the condition as mentioned under section 36(1) (va), the assessee shall be entitled to deduction with respect to such employees' contribution. Section 2(24)(x) refers to any sum received by the assessee from his employees as contribution and does not refer to employer's contribution. Under the circumstances and so long as and with respect....