Forbes Marshall Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 9, Pune

MA 368/PUN/2022

AI Insights

The case revolves around Forbes Marshall Pvt. Ltd., which filed a Miscellaneous Application seeking to recall an earlier Tribunal order due to non-adjudication of a specific ground challenging the denial of a deduction under section 35(2AB) for the assessment year 2014-15. The Tribunal acknowledged the oversight and proceeded to adjudicate the ground, determining that the assessee was entitled to the deduction as the amendment to the rule requiring electronic submission of the DSIR report in Form 3CL was not applicable for the year in question. The Tribunal's decision was based on the interpretation of the law as it stood before the amendment, which did not require year-to-year approval of the R&D expenditure for claiming weighted deductions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132870 (ITAT-PUNE)
• Duration Of Justice: 5 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-04-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 23-11-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority; Set aside

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER धिधिि आिेदन सं. / MA No.368/PUN/2022 (Arising out of ITA No.521/PUN/2019) धनिाारण िर्ा / Assessment Year : 2014-15 Forbes Marshall Pvt. Ltd., A-34/35, H Block, MIDC, Pimpri, Pune – 411018 PAN : AAACF2630E .......अपीलार्थी / Appellant बनाम / V/s. DCIT, Circle – 9, Pune ......प्रत्यर्थी / Respondent Assessee by : Shri Kishor B. Phadke Revenue by : Shri Ganesh B. Budruk सुनवाई की तारीख / Date of Hearing : 21-04-2023 घोषणा की तारीख / Date of Pronouncement : 24-04-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : By this Miscellaneous Application the assessee seeks to recall the order dated 03-08-2022 passed by this Tribunal in ITA No.521/PUN/2019 for assessment year 2014-15 on account of non-adjudication of ground No.5. 2. On perusal of order dated 03-08-2022 passed in ITA No. 521/PUN/2019 for A.Y. 2014-15, we note that this Tribunal inadvertently did not adjudicate the ground No. 5 raised by the assessee challenging the 2 MA No. 368/PUN/2022, A.Y. 2014-15 action of CIT(A) in confirming the order passed by the AO in denying deduction u/s. 35(2AB) of the Act. The ld. DR did not dispute the same. Therefore, we recall the order dated 03-08-2022 passed by this Tribunal in ITA No. 521/PUN/2019 for A.Y. 2014-15 to the extent for adjudication of ground No. 5 raised by the assessee in Form No. 36 of the appeal memo. 3. Both the parties conceded that the issue raised in ground No. 5 is covered in favour of the assessee for the reason, non-applicability of the amendment carried out to Clause (b) of Rule 6(7A) w.e.f. 01-07-2016 for the year under consideration i.e. A.Y. 2014-15. Therefore, since the issue is covered in favour of the assessee, we proceed to adjudicate ground No. 5 in this proceedings itself in order to avoid multiplicity of the proceedings. Therefore, with the consent of both the parties, we proceed to hear ground No. 5 raised by the assessee. 4. On peruse of the order of AO, we note that the deduction claimed u/s. 35(2AB) of the Act was denied for non-submission of copy of report of the competent authority i.e. DSIR in the prescribed form i.e. Form 3CL vide para 6 of the assessment order. The CIT(A) confirmed the order of AO. We note that prior to amendment to Clause (b) of Rule 6(7A) w.e.f. 01-07-2016, the position was that the prescribed authority shall submits its report in relation to the approval of in-house Research and Development facility in Form 3CL to the Director General (Income Tax Exemptions) within sixty days of its granting approval. After amendment w.e.f. 01-07-2016 it is provided 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 3 MA No. 368/PUN/2022, A.Y. 2014-15 previous year and eligible for weighted deduction under sub-section (2AB) of section 35 of the Act in Part B of Form No. 3CL. Therefore, it is clear before amendment the requirement of registration with DSIR is sufficient, no grant of year to year approval of the amount spent on Research and Development by a company qualifying for weighted deduction is required. Thus, we are of the opinion that once the assessee has been registered, other necessary requirements have been satisfied, the entire amount spent on Research and Development qualifies for weighted deduction u/s. 35(2AB) of the Act irrespective of the fact that some amount was not approved by the DSIR. Therefore, the assessment year is being 2014-15 prior to amendment i.e. w.e.f. 01-07-2016, we hold the assessee is entitled to claim deduction u/s. 35(2AB) of the Act. Thus, the order of CIT(A) is not justified and it is set aside. Thus, ground No. 5 raised by the assessee is allowed. 5. This order is to be treated as part and parcel of order dated 03-08- 2022 passed by this Tribunal in ITA No. 521/PUN/2019 for A.Y. 2014-15 for the sake of convenience. 6. In the result, the Miscellaneous Application filed by the assessee is allowed. Order pronounced in the open court on 24 th April, 2023. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 24 th April, 2023. रदव 4 MA No. 368/PUN/2022, A.Y. 2014-15 आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-6, Pune 4. The Pr. CIT-5, Pune 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune