2018 (10) TMI 429 - AT - Income Tax

Claim u/s 35(2AB)(1) denied - assessee failed to produce original copies of duly approved Form 3CK, 3CL and 3CM, from the Department of Scientific & Industrial Research (DSIR) - Held that - The facts in the case of M/s. Texmaco Rail & Engineering (2017 (9) TMI 958 - ITAT KOLKATA) is different from the facts of case on hand for the reason, that the M/s Texmaco Rail & Engineering had produced copies of certificate of registration from 1st April, 2010 to 31st March, 2019, issued by DSIR. It had also filed copies of details of approval prescribed in Form 3CM for the subsequent Financial Year 2015-16. In the case on hand, certificate of registration for the impugned Assessment Year has not been produced by the assessee. Thus, this case-law does not apply. - Decided against assessee.

Summary

Issues:
1. Rejection of claim under section 35(2AB)(1) of the Income Tax Act, 1961 due to failure to produce original copies of approved forms from DSIR.

Analysis:
The appeal was against the order of the Commissioner of Income Tax (Appeals) relating to Assessment Year 2010-11. The main issue was whether the Assessing Officer was justified in rejecting the claim of the assessee under section 35(2AB)(1) for not submitting original copies of approved forms from DSIR. The assessee, a company manufacturing/exporting power supplies, inverters, and audio equipment, claimed that it had been running in-house research activities approved by DSIR since 2005-06. The assessee submitted Form 3CK for the relevant years but faced delays and issues in obtaining approvals due to various reasons, including technical personnel's illness and system changes.

The Tribunal considered the assessee's submissions and compared them with relevant case laws. The Tribunal distinguished the present case from the case of M/s. Texmaco Rail & Engineering and Zeus Numerix Pvt. Ltd., stating that the facts were different. The Tribunal emphasized the importance of producing the certificate of registration for the impugned assessment year, which the assessee failed to do. Additionally, the Tribunal cited a recent judgment of the Hon'ble Supreme Court regarding the strict interpretation of exemption notifications and the burden of proof on the assessee to establish eligibility for exemptions.

Based on the legal principles established by the Supreme Court, the Tribunal upheld the order of the First Appellate Authority and dismissed the appeal of the assessee. The decision was made on the grounds that the assessee did not meet the requirements under section 35(2AB)(1) and failed to provide necessary documentation, including the certificate of registration from DSIR for the relevant assessment year. The judgment was delivered on October 5, 2018, by Sri J. Sudhakar Reddy, Accountant Member of the ITAT Kolkata.