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TMI Blog2016 (1) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 35(2AB) of the Act to the extent of Rs. 1,25,32,197/-. According to the ld. Representative, the assessee owns an in-house Research & Development Facility. Referring to the assessment order, the ld. Representative submitted that the Assessing Officer rejected the claim of the assessee on the ground that the assessee has not obtained the approval of the prescribed authority, i.e Department of Scientific & Industrial Research (DSIR) as required u/s 35(2AB) of the Act. Referring to page 50 of the paper book, the ld. Representative submitted that the assessee requested the DSIR to issue a certificate on the expenditure incurred on Research & Development facility as required u/s 35(2AB) of the Act. However, the DSIR clarified that approva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3CL. On a query from the Bench for the purpose of claiming deduction u/s 35(2AB) of the Act, the assessee has to obtain approval in Form 3CM from the Secretary to the Government of India, Department of Scientific & Industrial Research, whether such approval was obtained in writing in Form 3CB or not, the ld. Representative clarified that no such approval was obtained from the Secretary to the Government of India, Department of Scientific & Industrial Research in Form 3CM. However, the ld. Representative submitted that in view of the decision of the Hyderabad Bench of this Tribunal in M/s Sri Biotech Laboratories India Ltd.(supra) and the decision of the Mumbai Bench of this Tribunal in ACIT vs Meco Instruments P. Ltd in I.T.A.No. 4246/Mum/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch. 35. (1) In respect of expenditure on scientific research, the following deductions shall be allowed- ............................................. [(2AB) (1) Where a company engaged in the business of biotechnology 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 incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility as approved by the prescribed authority, then, there shall be allowed a deduction of a sum equal to two times of the expenditure so incurred." 5. In view of the above provision, approval of the prescribed auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval which is available at pages 94 and 95 of the paper book, cannot be construed as approval granted u/s 35(2AB) of the Act by the Secretary to the Government of India. Form 3CM clearly indicates that the approval has to be signed by the Secretary to Government of India, Department of Scientific & Industrial Research. The power was not delegated to any other authority in the Department to issue the certificate. However, in respect of claiming deduction u/s 35(2AA) after the approval was granted by the Principal Scientific Adviser to Government of India, the authorization can be issued by an Officer not below the lank of the Deputy Secretary to the Government of India. However, in case of deduction u/s 35(2AB) of the Act, no one else other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable to the facts of this case. Similarly, in the case before the Mumbai Bench of this Tribunal in Meco Instruments P. Ltd (supra), the approval in Form 3CM was granted with effect from 1.4.2007 to 31.3.2011. The Tribunal further found that the application of the assessee for earlier assessment year was processed, however, no order was passed. Referring to proviso to Rule 6(5A)of the Income-tax Rules, the Tribunal found that the application of the assessee cannot be rejected without giving a reasonable opportunity of being heard. Since such an opportunity was not given, the Tribunal found that for earlier assessment year also the approval was deemed to be granted. In the case before us no material is available on record to suggest that app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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