TaxTMI 
TaxTMI 
2026 (5) TMI 895
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.... the submission of the Appellant. 3. The Ld. CIT(A) has erred in upholding the action of the Ld. AO in not rectifying the assessment order dated 24.04.2021, by restricting the disallowance u/s 35(2AB) of the Act to Rs. 12.99 lakhs in place of Rs. 26.13 lakhs as made in the said assessment order. 4. The Ld. CIT(A) erred in upholding the action of the Ld. AO stating that since documentary evidence in Form 3CL was not filed in the course of assessment proceeding and therefore, such form being additional evidence cannot be considered in the course of rectification proceeding. 5. The Ld. CIT(A) erred in upholding the action of the Ld. AO stating that documentary evidence in Form 3CL was not part of record and therefore, there is no mistake apparent from record. 6. The Ld. CIT(A) erred in upholding the action of the Ld. AO in failing to take into consideration the fact that such Form 3CL was sent by the authority to the Ld. AO as per Rule 6, sub-rule (7A) of the Income-tax Rules, 1962 and therefore, it is not an additional evidence and therefore, forms part of record." 3. The solitary grievance of the assessee is against the computation of deduction....
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.... Total Revenue Expenditure B(i)to(iv)eligible U/S 35(2AB) 1,12,38,310 Total Expenditure on the approved R&D centre (A+B) 1,29,80,528 5. The assessee also provided various other details as sought during the scrutiny assessment proceedings. Vide another notice dated 17.04.2021 issued under section 142(1) of the Act, the assessee was asked to furnish Form 3CL working and approval letter. In view of the COVID pandemic restrictions, the assessee sought further time from the AO with its letter dated 22.04.2021. However, the Assessing Officer ("AO"), vide order dated 24.04.2021 passed under section 143(3) read with section 144B of the Act, disallowed the entire amount of deduction claimed under section 35(2AB) in respect of capital expenditure amounting to Rs. 26,13,327/- (150% of Rs. 17,42,218/-) on the basis that the assessee has not submitted any supporting documents and report in Form 3CL for capital expenditure. 6. On 17.05.2021, the assessee filed rectification application under section 154 of the Act, inter alia, in respect of its claim of deduction under section 35(2AB) of the Act on the basis that in view of the Form....
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....ion of the appellant that the assessing officer has erred in not rectifying the assessment order dated 24.04.2021, by restricting the disallowance u/s 35(2AB) of the Act to Rs. 12.99 lakhs in place of Rs. 26.13 lakhs as made in the said assessment order is not found correct. Hence, the action of the assessing officer is confirmed." Being aggrieved, the assessee is in appeal before us. 7. During the hearing, the learned Authorized Representative ("learned AR") submitted that Form 3CL was issued by the Secretary, Department of Scientific and Industrial Research ("DSIR"), Ministry of Science and Technology, Government of India, on 24.06.2020 and the copy of the said Form 3CL was also marked to ACIT, Circle 8(3)(1), Room Number 615, 6th Floor, Aaykar Bhawan, MK Road, Mumbai, who was the Jurisdictional Assessing Officer of the assessee. The learned AR submitted that as Form 3CL issued by the DSIR allowed the entire capital expenditure of Rs. 17,42,218/-, the assessee, in its rectification application, claimed that the disallowance of Rs. 26,13,327/-, being 150% of the capital expenditure, be deleted. Further, in all fairness, as the DSIR vide Form 3CL only approved revenue expendi....
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....s noted in the foregoing paragraphs. However, the assessee could not furnish the report of the specified authority under Form 3CL, as sought vide notice issued under section 142(1) of the Act on 17.04.2021, due to COVID-related restrictions. From the perusal of the copy of Form 3CL as placed in the paper book at pages 94-95, we find that the Form 3CL issued by the specified authority on 24.06.2020 was also sent to the Jurisdictional Assessing Officer. Therefore, we do not find any merit in the findings in the rectification order, as upheld by the learned Addl./Joint CIT(A), that the said Form 3CL was additional evidence which was produced by the assessee for the first time during the rectification proceedings, since the said Form 3CL was already available in the record of the Jurisdictional Assessing Officer. 10. At this stage, it is relevant to note the provisions of section 35(2AB)(1) of the Act, as it stood in the relevant year, which read as follows: - "(2AB)(1) Where a company engaged in the business of bio-technology or in any business of manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule....
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.... Form No. 3CL; (ba) The report in Form No. 3CL referred to in clause (b) shall be furnished electronically by the prescribed authority to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax or Principal Director General of Income-tax or Director General of Income-tax having jurisdiction over such company within one hundred and twenty days,- (i) of the grant of the approval, in a case referred to in sub-clause (i) of clause (b); (ii) of the submission of the audit report, in a case referred to in sub-clause (ii) of clause (b); (c) The company shall maintain a separate account for each approved facility; which shall be audited annually and 44[a report of audit in Form No. 3CLA shall be furnished electronically to the Secretary, Department of Scientific and Industrial Research on or before the due date specified in Explanation 2 to sub-section (1) of section 139 of the Act for furnishing the return of income, for each succeeding year]. Explanation.- For the purposes of this sub-rule the expression "audited" means the audit of accounts by an accountant, as defined in the Explanation below sub-section (2) of sec....