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2020 (2) TMI 508 - AT - Income TaxExemption u/s 35(2AB) denied - Penalty u/s 271(1)(c) - there was no approval in form No. 3CM - Addition on the ground that, although, the R&D facilities were recognized by the DSIR, but for the purpose of tax exemption it has to be approved by the competent authority i.e The Secretary, Department of Scientific and Industrial Research, Ministry of Science and Technology, Govt. of India. - HELD THAT:- The recognition was valid from 01.04.2001, and which was available during this period. Assessee facility was approved by the competent authority i.e the Secretary DSIR, but there was no approval in form No. 3CM for the impugned Assessment year. From the settled legal position of the law by the various cases of High Courts as discussed what is relevant to decide eligibility for weighted deduction u/s 35(2AB) is existence of R&D facility and recognition of such facility by the competent authority. Once the facility has been approved by the competent authority, then there is no cut off date is prescribed for approval of such facility and the benefit of deduction u/s 35(2AB) of the Act, should be given to the assessee as long as the recognition is in force. A.O as well as Ld. CIT(A) were incorrect in denying the benefit of weighted deduction claimed u/s 35(2AB) of the. Hence, we direct the A.O to allow weighted deduction claimed u/s 35(2AB) Penalty u/s 271(1)(c) - once addition on which penalty levied u/s 271(1)(c) of the Act, has been finally deleted by the appellate authorities, then there is nothing survives to levy penalty u/s 271(1)(c) of the Act. Hence, we are of the considered view that the penalty levied by the A.O u/s 271(1)(c) of the Act, cannot survive in the eyes of law. CIT(A) although confirmed additions made by the A.O towards disallowance of weighted deduction claimed u/s 35(2AB) of the Act, but deleted the penalty levied u/s 271(1)(c) on the ground that mere making a claim which was not accepted by the A.O cannot leads to a conclusion that the assessee has furnished inaccurate particulars of income which warrants levy of penalty U/s 271(1)(c) - Decided in favour of assessee.
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