Amendment of section 35
12. In section 35 of the Income-tax Act,( Amendment of section 35.) with effect from the 1st day of April, 2016,-
(i) in sub-section (2AA), in the proviso, after the words “submit its report to the”, the words “Principal Chief Commissioner or Chief Commissioner or” shall be inserted;
(ii) in sub-section (2AB),-
(a) in clause (3), for the words “for audit of accounts maintained for that facility”, the words “fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed” shall be substituted;
(b) in clause (4), after the words “approval of the said facility to the”, the words “Principal Chief Commissioner or Chief Commissioner or” shall be inserted.
Notes on Clauses:
Clause 12 of the Bill seeks to amend section 35 of the Income tax Act relating to expenditure on scientific research.
The existing proviso to sub-section (2AA) of the said section 35, inter alia, provides that the prescribed authority shall submit its report to Principal Director General or Director General. It is 79 proposed to insert the reference of Principal Chief Commissioner or Chief Commissioner in the said proviso so as to enable the prescribed authority to submit its report to the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General.
The existing provision contained in clause (3) of sub-section (2AB) of the said section provides that no company shall be entitled for deduction under clause (1) of the said sub-section (2AB) unless it enters into an agreement with the prescribed authority for cooperation in such research and development facility and for audit of the accounts maintained for that facility.
It is proposed to amend clause (3) of sub-section (2AB) of the said section to provide that no company shall be entitled for deduction under clause (1) of the said sub-section (2AB) unless it enters into an agreement with the prescribed authority for cooperation in such research and development facility and fulfils conditions with regard to maintenance and audit of accounts and furnishing of report, as may be prescribed.
The existing provisions contained in clause (4) of sub-section (2AB) of the said section 35 further provides that the prescribed authority shall submit its report in relation to the approval of the research and development facility to the Principal Director General or Director General. It is proposed to insert the reference of Principal Chief Commissioner or Chief Commissioner in the said clause so as to enable the prescribed authority to submit its report to the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General.
These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years.
