Applied Research International Pvt. Ltd. Vs Secretary Department of Scientific And Industrial Research & Anr. (Delhi High Court)
The petition before the Delhi High Court challenged the respondents’ failure to favourably consider the petitioner’s applications dated 31.03.2016 and 30.03.2017 seeking recognition and approval of its Research and Development (R&D) facility under Section 35(2AB) of the Income Tax Act, 1961 for Financial Years (FY) 2015-16 and 2016-17.
The petitioner submitted that it had filed the requisite applications in March 2016 and March 2017 for the relevant financial years and had also made several follow-up representations. Despite this, the respondents did not grant recognition or approval for the R&D facility for FY 2015-16 and FY 2016-17. It was pointed out that recognition for the petitioner’s R&D unit was later granted on 26.10.2016, and approval under Section 35(2AB) was granted with effect from 01.04.2017. According to the petitioner, this demonstrated that there was no fundamental or “in principle” impediment to granting approval for the earlier financial years.
The petitioner referred to a letter dated 02.08.2021 issued by the respondents, which acknowledged that approval had been granted by issuing Form No. 3CM for FY 2017-18. However, the petitioner contended that this communication failed to address or assess its eligibility and entitlement for issuance of Form No. 3CM and Form No. 3CL for FY 2015-16 and FY 2016-17.
