Case Law Details
Century Seeds Private Limited Vs DCIT (ITAT Hyderabad)
With reference to the finding of the Ld. CIT that the Form 3CM and 3CL are not filed which are mandatory, it was the submission that assessee has filed Form 3CM in letter format issued by DSIR granting renewal of recognition up to 3 1.03.2015 by the letter dated 18.04.2011 before the A.O. So the finding of CIT is not correct. Further, it was submitted that the Form 3CL is a communication by DSIR to the DIT (E) and referred to Rule 6 (7A) to reiterate that assessee had no role in that, except filing form in 3CK which it did. Since the assessee complied with the conditions prescribed and A.O. enquired and allowed the claim, the exercise of jurisdiction by the Pr. CIT is bad in law.
FULL TEXT OF THE ITAT JUDGMENT
The issue in this appeal by assessee is whether the jurisdiction exercised by Ld Principal Commissioner of Income Tax (Pr. CIT-2), Hyderabad u/s 263 vide his order dated 27/03/2017 is valid or not.
2. Briefly stated facts are assessee-company filed its return of income for the A.Y. 2012-13 on 08.09.2012 admitting total income of Rs. 24,00,510/-. The case was selected for scrutiny under CASS. Assessing Officer completed the assessment u/s 143(3) of the Act on 30.05.20 14 determining the total income at Rs. 42,74,025/-. Subsequently, Ld. CIT invoked jurisdiction u/s 263 and issued a show-cause notice to the assessee stating “on perusal of the record, P & L Account and balance sheet, it was noticed that the assessee claimed deduction u/s 35(2AB) of the I.T. Act at Rs. 2,71,17,627/-”. Ld CIT-2 observed that “as per the I.T. Act, to avail weighted deduction u/s 35(2AB) the assessee had to submit the form 3CM order of approval of in-house research and development facility by DSIR and Form 3CL in which the prescribed authority (DSIR) certify the expenditure which entitle the assessee to avail weighted deduction. However, the assessee did not submit any details in Form 3CM and 3CL report. Further, as per clause 15 of the 3CD, Auditor has not certified any admissible deduction u/s 35(2AB). In the absence of mandatory Form 3CM and Form 3CL, allowance of weighted deduction cannot be given. The A.O. allowed this allowance, without complying the related provisions of law, as mentioned above. Since the Assessing Officer has not brought anything on record about this allowance, the same has to be treated as non-application of mind. This non-application of mind is to be treated as “error” as held by the Hon’ble Supreme Court in the case of M/s. Malabar Industrial Limited”.
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