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TMI Blog2012 (8) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... i, Adv. For Respondent : Mr.Kiran Babu, Sr.Standing Counsel JUDGEMENT Per : S Ravindra Bhat, J : Issue notice. Mr.Kiran Babu, Sr.Standing Counsel for the revenue, accepts notice and submits that since the matter may be heard finally. 1. The petitioner is aggrieved by order dated 20th March, 2012, whereby it was refused to grant of approval in terms of Section 35(1)(ii) of the Income Tax Act, 1961. 2. The petitioner, Shriram Scientific Industrial Research Foundation, which was established in the year 1940, was notified as Scientific Industrial Association on 23rd November, 1946. Its position as Scientific Industrial Association remained unbroken till 1996. W.e.f. 1st April, 1997, the Central Government notified its status as Scientific Research Institution. Since the petitioner was not adversely affected in the sense that the tax concession benefit admissible to it was not withdrawn up to 1996, the petitioner s position as Scientific Research Institution continued. It was sought to be treated as Scientific Research Association. This was, however, contested and the Appellate Tribunal ultimately ruled in favour of the petitioner which become conclusive. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Indian Planetary Society v. CBDT (2009) 318 ITR 102 (Bom.) has held as under:- On a perusal of the prevision of Section 35(1(ii) and the proviso it would be clear that the authority to grant permission is the Government of India. Where the permission for approval had been rejected by the Central Board of Direct Taxes and nothing had been shown to indicate that the Central Board of Direct, under the Business Rules of the Government of India, had been allowed to discharge functions of the Government under Section 35(1)(ii), rejection of the application for approval by the CBDT was not valid and the order liable to be set aside and the matter remanded to the Government of India for reconsideration according to law 5. That it is pertinent to submit and place on records that the Assessee Foundation is recognized as Scientific and Industrial Research Organisation by the Government of India, Ministry of Science and Technology, Department of Scientific and Industrial Research, New Delhi. The letter issued by the Ministry of Science and Technology, Government of India is attached herewith for your kind reference and record. Annexure-1 6. That in the case of Indian Planetar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esearch or on the purchase of materials used in such scientific research, the aggregate of the expenditure so laid out or expended within the three years immediately preceding the commencement of the business shall, to the extent it is certified by the prescribed authority 535 to have been laid out or expended on such scientific research, be deemed to have been laid out or expended in the previous year in which the business is commenced; (ii) Any sum paid to a scientific research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research : Provided that such association, university, college or institution is for the time being approved for the purposes of this clause by the prescribed authority by notification in the Official Gazette; (iii) Any sum paid to a university, college or other institution to be used for research in social science or statistical research : Provided that such university, college or institution is for the time being approved for the purposes of this clause by the prescribed authority by notification in the Official Gazette; (iv) In respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regate of the expenditure so incurred within the three years immediately preceding the commencement of the business shall be deemed to have been incurred in the previous year in which the business is commenced; Explanation 2 : For the purposes of this clause, - (a) "Land" includes any interest in land; and (b) the acquisition of any land shall be deemed to have been made by the assessee on the date on which the instrument of transfer of such land to him has been registered under the Registration Act, 1908 (16 of 1908), or where he has taken or retained the possession of such land or any part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), the date on which he has so taken or retained possession of such land or part; (ii) Notwithstanding anything contained in clause (i), where an asset representing expenditure of a capital nature incurred before the 1st day of April, 1967, ceases to be used in a previous year for scientific research related to the business and the value of the asset at the time of the cessation, together with the aggregate of deductions already allowed under clause (i) fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a National Laboratory or a University or an Indian Institute of Technology with a specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority, then - (a) There shall be allowed a deduction of a sum equal to one and one-fourth times the sum so paid; and (b) No deduction in respect of such sum shall be allowed under any other provision of the Income-tax Act : Provided that the prescribed authority shall, before granting approval, satisfy itself about the feasibility of carrying out the scientific research and shall submit its report to the Director General in such form as may be prescribed. Explanation : For the purposes of this section, - (a) "National Laboratory" means a scientific laboratory functioning at the national level under the aegis of the Indian Council of Agricultural Research, the Indian Council of Medical Research, the Council of Scientific and Industrial Research, the Defence Research and Development Organisation, the Department of Electronics, the Department of Bio-Technology or the Department of Atomic Energy and which is approved as a National Laboratory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture shall be allowed under clause (i) of sub-section (1) or clause (ia) of sub-section (2) for the same or any other previous year. (c) Where a deduction is allowed for any previous year under this sub-section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed in respect of that asset under clause (ii) of sub-section (1) of section 32 for the same or any subsequent previous year. (d) Any deduction made under this sub-section in respect of any expenditure on scientific research in excess of the expenditure actually incurred shall be deemed to have been wrongly made for the purposes of this Act if the assessee fails to furnish within one year of the period allowed by the prescribed authority for completion of the programme, a certificate of its completion obtained from that authority and the provisions of sub-section (5B) of section 155 shall apply accordingly. (3) If any question arises under this section as to whether, and if so, to what extent, any activity constitutes or constituted, or any asset is or was being used for, scientific research, the Board shall refer the question to the prescribed authority, whose decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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