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2020 (1) TMI 1361 - ITAT BANGALORECondonation of delay - delay of 539 days in filing this appeal - HELD THAT:- The delay in filing of this appeal was on account of the then Finance Manager not following the issue with the Consultant. Later, the Finance Manager had resigned and the matter was left unattended. There are affidavits to the effect from both the earlier Manager and the present Manager of the assessee. The management came to know about the appeal not being filed on time when statutory audit for the financial year 2019-2020 was being prepared. Due to Covid-19 Pandemic, the process of filing the appeal took some more time from the end of the Chartered Accountant. Therefore, in the given facts and circumstances of the case, we are of the view that there is reasonable and sufficient cause in filing the appeal belatedly. Disallowance of deduction u/s 35(2AB) - AO disallowed the deduction on the ground that DSIR has not approved the expenditure in Form 3CL - CIT-A confirmed disallowance as stated that deduction u/s 35(2AB) of the I.T.Act. is not allowable to the extent of Research & Development activity carried outside the in-house R&D facility of the assessee - HELD THAT:- In the present case since the deduction is with reference to assessment year 2016-2017 (where the law applicable is the 1st day of April, 2016), which is prior to the Income Tax (Tenth Amendment) Rules, 2016, with effect from 01.07.2016 of Rule 6(7A) of the I.T.Rules, deduction u/s 35(2AB) has to be allowed on the basis of the expenditure as recorded by the assessee in the books of account. Admittedly, the Assessing Officer has not disputed the correctness of the claim of expenditure incurred on Scientific Research. The contention of the DR that the amendment to Rule 6(7A) is procedural cannot be accepted, since the amended rule stipulates a condition that apart from approval of in-house R & D facility of assessee, the expenditure also has to be quantified by the prescribed authority for weighted deduction u/s 35(2AB). As amended Rule 6(7A) effect the substantive right of the assessee and cannot be termed merely as procedural. Moreover, the co-ordinate Bench of Bangalore Tribunal in case of M/s.Mahindra Electric Mobility Ltd. v. ACIT [2019 (1) TMI 20 - ITAT BANGALORE] have clearly held that prior to 01.07.2016 Form 3CL has no legal sanctity and it is only w.e.f. 01.07.2016 with the amendment to Rule 6(7A) of the I.T.Rules, that the quantification of weighted deduction u/s 35(2AB) of the I.T.Act has significance. Therefore, we hold that the deduction u/s 35(2AB) of the I.T.Act be granted as claimed by the assessee instead of restricting it to the quantum of claim as mentioned in .Form No.3CL by the prescribed authority. - Decided in favour of assessee.
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