HLL LifeCare Limited V. Union of India and Department of Science and Technology and Department of Scientific and Industrial Research

WP(C)/23375/2020

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The case involves HLL LifeCare Limited, a government enterprise with an established Research and Development Center, seeking a writ of mandamus for a time-bound decision on their representations regarding the issuance of Form 3CL for the financial year 2017-18. The petitioner had previously benefited from a weighted deduction under Section 35(2AB) of the Income Tax Act, 1961, for expenditures on scientific research, which was disrupted due to a lapse in the renewal of recognition for their R&D center. The court's decision focused on ensuring that the petitioner's representations were considered promptly, without delving into the merits of the case.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 817774 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 10-11-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MINI GOPINATH
• Assessee Lawyers: M GOPIKRISHNAN NAMBIAR; K MATHAI; JOSON MANAVALAN; KURYAN THOMAS; PAULOSE ABRAHAM; RAJAKANNAN; S PARVATHI
• Keywords: Scientific research; Time-bound disposal; Weighted deduction; Recognition renewal
• Section: 35(2AB)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 10TH DAY OF NOVEMBER 2021 / 19TH KARTHIKA, 1943 WP(C) NO. 23375 OF 2020 PETITIONER: HLL LIFECARE LMITED HLL BHAVAN,POOJAPPURA.P.O, THIRUVANANTHAPURAM,KERALA-695012, REPRESENTED BY ITS COMPANY SECRETARY AND AVP (CAS)MR.JAIKRISHNAN.A.R. BY ADVS. M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN SMT.S.PARVATHI RESPONDENTS: 1 UNION OF INDIA REPRESENTED BY ITS SECRETARY, DEPARTMENT OF SCIENCE AND TECHNOLOGY, TECHNOLOGY BHAVAN,NEW MEHRAULI ROAD, NEW DELHI-110016. 2 THE SECRETARY, DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH,ROOM NO.14-B, TECHNOLOGY BHAWAN,S AND T BLOCK-1, NEW MEHRAULI ROAD,BLOCK C,QUTAB INDUSTRIAL AREA,NEW DELHI-110016. 3 THE JOINT SECRETARY(ADMINISTRATION), DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH,ROOM NO.14-B, TECHNOLOGY BHAWAN,S AND T BLOCK-1, NEW MEHRAULI ROAD,BLOCK C,QUTAB INDUSTRIAL AREA,NEW DELHI-110016. BY ADV SMT.MINI GOPINATH, CGC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 23375 OF 2020 2 BECHU KURIAN THOMAS, J .............................................… W.P.(C) NO.23375 OF 2020 …........................................ Dated this the 10th day of November, 2021 JUDGMENT The limited relief sought for in this writ petition is only for a direction to consider and dispose of Ext.P3 and Ext.P4 requests in a time bound manner. 2. Petitioner claims to be a Government of India enterprise and has an established Research and Development Center. The benefit of weighted deduction under Section 35(2AB) of the Income Tax Act 1961 on expenditure incurred on scientific research was available to the petitioner due to the recognition to the above mentioned center. 3. When the validity of the recognition and approval for the center expired on 31/3/2017, petitioner applied for renewal but only on 27/9/2018. Form 3CK required for the year 2017-18 was omitted to be submitted. Unfortunately, WP(C) NO. 23375 OF 2020 3 the approval was therefore granted afresh from 01/04/2018 creating a break for the year 2017-18. 4. Since a break in the approval has the tendency of affecting the petitioner prejudicially, a representation was filed on 22/10/2019 as Ext.P3. In Ext.P3 which was submitted before the 2nd respondent, petitioner had sought for issuance of Form 3CL claiming eligible weighted deduction benefit for the financial year 2017-18. Ext.P4 is yet another representation dated 27/11/2019 submitted before the 3rd respondent seeking the same relief. 5. Petitioner claims the benefit of weighted deduction under Section 35(2AB) of the Income Tax Act, 1961 and points out that all the years prior to 2017-18 and even subsequent thereto they were granted the benefit of weighted deduction under the afore stated section. However for one year in between, that is, for 2017-18, the approval was not granted to the petitioner due to which they lose the benefit of weighted deduction. It is also stated by the learned counsel for the petitioner that, by referring to Ext.P1, the recognition WP(C) NO. 23375 OF 2020 4 for the R&D centre of the petitioner at Sreekaryam, Thiruvananthapuram and Peroorkada, Thiruvananthapuram have already been extended upto 31/3/2021 and therefore, there are no circumstances warranting denial of recognition from being to the petitioner for one year in between. 6. The benefit of weighted deduction under Section 35(2AB) can be availed only if the research center is recognised. The purpose behind the statutory provision is to encourage research and development. The intent of the legislature ought not to be defeated on technicalities if the center is otherwise eligible to be recognised. 7. Be that as it may, since the sole relief in the writ petition is for a direction to consider Ext.P3 and Ext.P4, it may not be appropriate for this Court to go into the merits of the contentions raised. Suffice it to say the writ petition can be disposed of by directing the competent amongst the respondents to consider the representations filed by the petitioner . WP(C) NO. 23375 OF 2020 5 8. Accordingly there will be a direction to the 2nd respondent, who is stated to be the competent person, to consider and pass appropriate orders on Ext.P3 representation as expeditiously as possible, at any rate, within a period of two months from the date of receipt of a copy of this judgment. Needless to say, the petitioner shall be granted an opportunity of hearing before passing orders on the said application. This writ petition is disposed of as above. Sd/- BECHU KURIAN THOMAS JUDGE AJM WP(C) NO. 23375 OF 2020 6 APPENDIX OF WP(C) 23375/2020 PETITIONER’S EXHIBITS : EXHIBIT P1 A TRUE COPY OF THE RECOGNITION DATED 28.04.2017 GRANTED BY THE 2ND RESPONDENT. EXHIBIT P2 A TRUE COPY OF THE E-MAIL COMMUNICATION DATED 27.09.2019 FROM THE 2ND RESPONDENT. EXHIBIT P3 A TRUE COPY OF THE LETTER DATED 22.10.2019 (WITHOUT ANNEXURES)SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P4 A TRUE COPY OF THE LETTER DATED 27.11.2019 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. EXHIBIT P5 A TRUE COPY OF THE LETTER DATED 08.10.2020 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P6 A TRUE COPY OF THE E-MAIL DATED 08.10.2020 SENT BY THE PETITIONER TO THE 2ND RESPONDENT. Exhibit P7 A TRUE COPY OF THE ASSESSMENT ORDER DATED 26/02/2021 BY THE INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, DELHI. RESPONDENT’S EXHIBITS : NIL AJM //TRUE COPY// PA TO JUDGE "