Remedial action where approval u/s 35(1)(ii) subsequently withdrawn. - Income Tax - 1565/CBDT

INSTRUCTION NO. 1565/CBDT Dated: June 19, 1984 Attention is invited to the provisions of sec.35 of the I.T.Act. 1961 under which deduction is allowed in computing the business income of any sum paid to a scientific research association or to any other institution for scientific research provided such association or institution is approved by the prescribed authority for this purpose. 2. While examining this matter, the Public Accounts Committee has commented that in cases where approvals u/s.35(1)(ii) have been subsequently withdrawn, consequential actions against such institutions have not been taken by the department though, on withdrawal of the approval, the benefit given u/s.10(21) of the Income-tax Act will be denied, and the income of the institution will become taxable. 3. It is, therefore, impressed that appropriate remedial action may be taken against those institutions/associations where subsequently approvals u/s.36(1)(ii) of the I.T.Act. 1961 have been withdrawn. 4. These instructions may please be brought to the notice of all the officers working under you. Hindi version will follow shortly.