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TMI BlogPROCEDURE FOR MAKING APPLICATION FOR APPROVAL IN FORM 3CM AND SUBMISSION OF REPORT IN FORM 3CLX X X X Extracts X X X X X X X X Extracts X X X X ..... ional information as per annexure I of the guidelines (page 18). vi. Additional information as per Annexure-III for seed companies. vii. One page write-up clearly summarising the R D activities taken up separately at each of the R D centre/s recognised by DSIR. viii. Confirmation that the company does not manufacture any product listed in Schedule 11 of IT Act. ix. Total capital cost of in-house research facility, given break up of expenditure of complete research facility including cost of equipment, land building as on 31st March of last completed financial year. x. An undertaking that the company shall reflect the capital and revenue expenditure on R D in the schedules / notes to accounts in the audited financial statement of the company prepared for the purpose of published annual report as well as for the purpose of Income Tax returns. xi. A commitment that the company shall submit the desired information as per Annexure II Annexure III (Section-C) of DSIR Guidelines (pages 26 to 33) every year for the approved period while filing the Income Tax returns. 8. Documents required to be submitted for extension of approval in Form 3CM (1 set): - i. Income Tax prescribed Form 3CK giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed ]. ( 4 ) The prescribed authority shall submit its report in relation to the approval of the said facility to the 64 [ Principal Chief Commissioner or Chief Commissioner or ] 65 [Principal Director General or] Director General in such form and within such time as may be prescribed. 66 [ (5) No deduction shall be allowed in respect of the expenditure referred to in clause ( 1 ) which is incurred after the 31st day of March, 2017 . ] (6) No deduction shall be allowed to a company approved under sub-clause ( C ) of clause ( iia ) of sub-section (1) in respect of the expenditure referred to in clause ( 1 ) which is incurred after the 31st day of March, 2008. Amendment of section 35. 15 . In section 35 of the Income-tax Act, with effect from the 1st day of April, 2018, (i) in sub-section (1), (a) in clause (ii), (I) for the words one and three-fourth , the words one and one-half shall be substituted; (II) after the proviso, the following proviso shall be inserted, namely: Provided further that where any sum is paid to such association, university, college or other institution in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax or Director General of Income-tax having jurisdiction over the sponsor shall be substituted; (b) in sub-rule (7A),- (A) for clause (b), the following clauses shall be substituted, namely:- (b) The prescribed authority shall furnish electronically its report,- (i) in relation to the approval of in-house research and development facility in Part A of Form No. 3CL; (ii) quantifying the expenditure incurred on in-house research and development facility by the company during the previous year and eligible for weighted deduction under sub-section (2AB) of section 35 of the Act in Part B of Form No.3CL; (ba) The report in Form No.3CL referred to in clause (b) shall be furnished electronically by the prescribed authority to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax or Principal Director General of Income-tax or Director General of Income-tax having jurisdiction over such company within one hundred and twenty days,- (i) of the grant of the approval, in a case referred to in sub-clause (i) of clause (b); (ii) of the submission of the audit report, in a case referred to in sub-clause (ii) of clause (b); ; (B) in clause (c), for the words, fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the First Party within a period of one hundred and twenty days shall be substituted; (iii) in Part C, for items (iii) and (iv), the following shall be substituted, namely:- (iii) render full co-operation in carrying out the Research and Development work relating to bio-technology or manufacture or production of any eligible article or thing under sub-section (2AB) of section 35 of the Act; (iv) ensure that the company does not manufacture any product listed in the Eleventh Schedule of the Act; (v) ensure that the company shall reflect the capital and revenue expenditure on in-house research and development facility in the schedules/notes to accounts in the audited financial statement of the company prepared for the purposes of its annual report and for the purposes of computation of income-tax; (vi) submit the information as per Annexure-I and Annexure-II every year for the approved period on or before the due date specified in Explanation 2 to sub-section (1) of section 139 of the Act for furnishing the return of income; (vii) ensure that the assets acquired by the approved facility will be utilised only for the approved purpose and shall not be disposed of without the approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 35 of the Act, (iv) the First Party shall maintain separate accounts for both revenue and capital expenditure on scientific research including that on in-house Research and Development facility, which shall be annually audited by an accountant as defined in section 288(2) of the Income-tax Act, 1961, and a copy of which has to be attached with the return of income under sub-section (1) of section 139 to claim deduction under section 35(2AB), (v) subject to the First Party meeting the conditions specified under sub-section(2AB) of section 35, and on being satisfied of the feasibility of the said in-house Research and Development facility in terms of its objectives and of the genuineness of the expenditure on said Research and Development facility by First Party, the Second Party shall submit its report in relation to the approval of the said facility to the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax or Principal Director General of Income-tax or Director General of Income-tax having jurisdiction over the First Party within a period of one hundred and twenty days from the date which the First Party makes application in the Form No. 3CK. Agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------ Signature of the Principal Officer of the company (Name, Designation and address) Place Date Notes: 1. Single set of duly filled applications are to be submitted to the Secretary, Department of Scientific Industrial Research. 2. Copy of the latest Annual Report along with Balance Sheet has to be enclosed. 3. Enclose a copy of DSIR recognition of the in-house (R D) centre. FORM NO. 3CM Order of approval of in-house research and development facility under section 35(2AB) of the Income-tax Act. 1961 1. Name, Address and PAN of the company 2. Nature of the business of the company Manufacture/production of article or thing 3. Objectives of the scientific research to be conducted by in-house Research and Development facility 4. Address at which such Research Development facility is located 5. Ref. No. and Date of the application 6. Registration number; date and validity of recognition granted by Department of Scientific and Industrial Research to the in-house Research and Development centre of the company The above Research Development facility is approved for the purpose of section 35(2AB), subject to the conditions underlined therein. Place : .. Date : ... (Signature) (Name) Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SUBMITTED ALONG WITH FORM 3CK (Updated Renewal/ Recognition Application) PART-A: CORPORATE 1. Details of DSIR recognition: (a) Initial recognition date: (b) Recognition valid up to: (c) Recognition No. 2. Name of the company 3. Brief history of the company 4. Address: (a) Head office (b) Delhi office (c) Factory/factories (d) R D laboratory (ies) recognized (e) R D laboratory (ies) applied for approval u/s 35(2AB) of IT Act (f) R D laboratory (ies) other than (d) and (e) 5. Nature of business 6. Company Structure (a) Public/Private/Co-operative/Joint Sector/ Proprietary/Partnership concern/100%EOU (b) Whether Foreign Equity Participation (Please give name of foreign equity participant and percentage thereof) (c) Names of Directors of the Board/Proprietors (d) Name and address of NRI(s), if any 7. Capital structure (a) Authorised Capital (b) Paid-up Capital 8. Category of the firm: Large / Medium / Small Scale Unit 9. Administrative Ministry Concerned: 10. Technical Collaboration, if any: (a) Foreign S.No. Product Name Address of the Technical Collaborator History of Collaboration (b) Indian S.No. Product Name Address of the Technical Collaborator History of Collaboration (c) Detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name Designation (b) Qualification (c) Experience Date of appointment to the post Contact Nos (Telephone, Mobile, Fax and Email) 11. Details of R D achievements made during the past 3 years: (a) New products developed (b) New processes developed (c) Improvement in existing production process(s) (d) Energy conservation (e) Pollution control (f) Import substitution (indicate items developed and foreign exchange earned). (g) Seminars/symposia attended by R D staff (attach a separate sheet giving details) (h) Number of papers published (attach reprints if available) (i) Number of R D personnel who attended R D training (Give details in a separate sheet). 12. Patents filed in India or abroad during the last 3 years: S. No. Products/Process Names of the Country Year Patent No. 1 2 3 4 5 13. Whether any of the new technologies developed by the company have been (a) commercialised by the company S.No. Technology Year of commercialisation 1 2 3 (b) exported S. No. Technology Year Exported to Party Country 1 2 3 4 5 (c) sold to other parties in India/abroad S. No. Technology Year Party 1 2 3 4 14. Give particulars of R D projects in progress, as per Appendix 1 to Annexure - III 15. R D proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No : Place: Date: Section- C Documents required to be submitted during October for each subsequent year of the approved period u/s 35 (2AB) of the Income Tax Act. Important instructions: - a All documents submitted should be page numbered. b Adequate specifications of equipment are furnished along with capitalized cost. c Details of manpower cost needs to be submitted in three statements providing remunerations paid to each employee for the complete year i.e. alphabetic list of R D employees for the complete year along with designation qualification ; employees joined during the year and employee left during the year. d Only one copy is required to be submitted. 1. A crisp write-up not exceeding one page on the thrust areas and significant achievements of each In-house R D facility duly signed by the head R D along with his contact phone number and e-mail ID to be submitted. 2. Details of Expenditure for each approved R D centre separately as per Annexure II of DSIR guidelines duly certified by the company and the statutory auditors. 3. Details of R D progress for each approved In-house R D facility as per Appendix I to Annexure II of DSIR guidelines 4. A table consolidating detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nodal officer for providing any clarifications. Annexure-II Details of expenditure incurred on the research and development facility centre approved by the prescribed authority under section 35(2AB) of the Act . 1. Assessment year : 2. Previous year : 3. Location of the research and development facility: 4. Details of expenditure: (in Rs. Lakhs) A. (i) Land (ii) Buildings B. Capital Expenditure ( attach a separate sheet giving item-wise break-up of items costing more than Rs. 1 lakh) . (i) Equipment . (ii) Others . (a) ........................................ . (b) ........................................ . (c) ........................................ (iii) Total C. Revenue expenditure* (R D manpower salary/wages, materials/consumables, utility Any other expenditure directly related to R D ) Give item-wise details of items costing more than Rs. 50,000/- each in separate sheet . (a) ........................................ . (b) ........................................ . (c) ........................................ Total D. Total expenditure on the approved research and development centre (excluding land and building) E. Details of assets disposed off/transferred. I certify that ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t para Rs. 4 is correct to the best of my knowledge and belief as per the result of the audit of the approved R D Centre carried out by me. Also R D capital expenditure is reflected on page ----and revenue expenditure on page ---- in the audited financial statement/annual report It is further certified that the expenditure claims do not include the following: - i. Expenditure on outsourced R D activities. ii. Expenditure purely related to market research, sales promotion, quality control, testing, commercial production, style changes, routine data collection or activities of a like nature. iii. Lease rent paid for research farms or research labs. iv. Capitalized expenditure of intangible nature. v. Expenditure on foundation seeds multiplication, demonstration crops and grow out test etc. beyond breeder seed development. vi. Foreign patent filing expenditure. vii. Consultancy expenditure, retainership, contract manpower / labour. viii. Building maintenance, Municipal taxes and rental charges being paid. ix. Any interest component on loans for R D. x. Clinical trial activities carried out outside the approved facilities. xi. Contract research expenses duly certified by chartered acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RM No. 3CLA [See rule 6] Report from an accountant to be furnished under sub-section (2AB) of section 35 of the Act relating to in-house scientific research and development facility 1. * I/We have audited the accounts of the in-house research and development centre of M/s ____________ located at ____________ which is approved under section 35(2AB) of the Act by the prescribed authority (Secretary, Department of Scientific and Industrial Research), vide Order No. ______ dated __________. 2. * I/We certify that: (a) The company has maintained separate accounts for the research and development centre approved by Department of Scientific and Industrial Research under sub-section (2AB) of section 35 of the Act. (b) The accounts have been satisfactorily maintained. The expenditure certified is also in consonance with Department of Scientific and Industrial Research guidelines. 3. The expenditure of Rs. ________ (Revenue Rs. ___; Capital Rs. _____; Land and Building Rs._____; others Rs.____) reported for the financial year ________ relevant to the assessment year ______ is correct to the best of my/our knowledge and belief as per the result of the audit of the approved research and develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted tax deduction u/s 35(2AB) of IT Act . Annexure -IV THE ELEVENTH SCHEDULE LIST OF ARTICLES OR THINGS 1. Beer, wine and other alcoholic spirits. 2. Tobacco and tobacco preparations, such as, cigars and cheroots, cigarettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco and snuff. 3. Cosmetics and toilet preparations. 4. Tooth paste, dental cream, tooth powder and soap. 5. Aerated waters in the manufacture of which blended flavouring concentrates in any form are used. [ Explanation . Blended flavouring concentrates shall include, and shall be deemed always to have included, synthetic essences in any form.] 6. Confectionery and chocolates. 7. Gramophones, including record-players and gramophone records. 8. 14 [***] 9. 15 [Projectors.] 10. Photographic apparatus and goods. 11-21. 14 [***] 22. Office machines and apparatus such as typewriters, calculating machines, cash registering machines, cheque writing machines, intercom machines and teleprinters. Explanation: The expression office machines and apparatus includes all machines and apparatus used in offices, shops, factories, workshops, educational institutions, railway stations, hotels and restaurants for doing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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