Issue/approval of notifications under section 10(23C)(iv) and section 35(1)(ii)/(iii) of Income-tax Act, 1961--After completion of assessments--Rectification of mistake--Regarding - Income Tax - 725

Issue/approval of notifications under section 10(23C)(iv) and section 35(1)(ii)/(iii) of Income-tax Act, 1961--After completion of assessments--Rectification of mistake--Regarding. Circular No. 725 Dated 16/10/1995 Section 10(23C)(iv) of the Income-tax Act, 1961, provides that any income receive by a person on behalf of any fund or institution established for charitable purposes is not includible in the total income if the said found or institution is notified by the Central Government in the Official Gazette, having regard to the objects of the Fund or institution and its importance throughout India or throughout any State or States. (2) Section 35(1)(ii) provides for deduction out of profits computed under the head "Profits and gains of business or profession", in respect of any sum paid to the scientific research association which has as its object the undertaking of scientific research or to a university, college or other institutions to be used for scientific research. Similarly, clause (iii) of sub-section (1) of section 35 provides for deduction in respect of any sum paid to a university, college or other institution to be used for research in social science or statistical research. The deductions under section 35(1)(ii) or under section 35(1)(iii) are admissible only if such association, university, college or institution is for the time being approved for the purposes of these clauses, by the prescribed authority, by notification in the Official Gazette. (3) The Board have received representations that quite often the notifications are issued much after the completion of assessments of the relevant persons for the relevant assessment years. The Assessing Officers have rejected applications under section 154 on the ground that the notification was issued subsequent to the passing of the assessment order and thus there was no mistake apparent from the record. (4) The matter has been examined. The Board are of the view that in view of the notification issued at a subsequent date but which is applicable to the assessment year/s involved in the application, there is a mistake apparent from the record which can be rectified under section 154 of the Income-tax Act. However, while disposing of the rectification applications, the Assessing Officer must ensure that the conditions subject to which the approve was granted are satisfied. (5) This may be brought to the notice of all Assessing Officers working in your region. Yours faithfully, (Sd.) H.K. Choudhary, Under Secretary, Central Board of Direct Taxes.