Case Law Details
FDC Limited Vs PCIT (ITAT Mumbai)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) of Mumbai has quashed the revision order dated March 13, 2023, passed by the Principal Commissioner of Income Tax-1 (PCIT), Mumbai, against FDC Limited. The core issue revolves around whether the issuance of Form 3CM and Form 3CL by the Department of Scientific and Industrial Research (DSIR) is mandatory for allowing deductions under section 35(1)(i) of the Income Tax Act. The ruling is anticipated to have wide-ranging implications for companies claiming such deductions.
Form 3CM and Form 3CL: Are they Mandatory?
According to PCIT, Form 3CM and Form 3CL issued by the DSIR were mandatory for allowing deductions under section 35(1)(i). However, ITAT clarified that these forms are not compulsory for the deductions claimed under section 35(1)(i), citing that the forms were only applicable for deductions under section 35(2AB).
Section 35(2AB) of the Income Tax Act: The case raised concerns about whether the Assessing Officer (AO) was correct in allowing the deduction without obtaining Form 3CL. ITAT noted that even though the form was to be submitted by the prescribed authority, the AO had the responsibility to verify the completion of this requirement.
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