Neo Seeds India Limited, Hyderabad, ... vs Assessee

This is an appeal filed by the appellant-company for the Assessment Year (AY) 2011-12 against the order of the Commissioner of Income Tax(Appeals)-4, Hyderabad, dated 24-12-2014 raising the following grounds:

" 1. On the facts and in the circumstances of the case the order of the Commissioner of Income Tax (Appeals)-IV, Hyderabad, dismissing the appeal of the appellant is illegal and against the provisions of the Income Tax Act and unsustainable in law.

2. The Commissioner of Income Tax (Appeals) erred in sustaining the disallowance of weighted deduction claimed by the Appellant under section 35(2AB) of the Income Tax Act, 1961. The learned Commissioner :- 2 -: I.T.A.No. 288/Hyd/2015 M/s. Neo Seeds India Ltd.,

(Appeals) failed to appreciate that the delay is from the DISR which has not issued Form 3CL to make a claim for deduction in spite of the fact that the Appellant has satisfied all the conditions for claiming deduction".

2. The brief facts of the case are that, the appellant is a company incorporated under the provisions of Companies Act, 1956. The appellant is engaged in the business of manufacturing and trading of seeds. For the AY. 2011-12, the appellant had filed return of income on 29-09-2011 through electronic mode of filing disclosing the income of Rs. 65,06,119/-. Against the said return of income, the assessment was completed by the Dy. CIT, Circle-16(1), Hyderabad vide order dt. 17-12-2013 at a total income of Rs. 1,17,09,281/-. While doing so, the Ld. Assessing Officer (AO) disallowed the claim for weighted deduction in respect of research and development expenditure u/s. 35(2AB) of the Income Tax Act, 1961 (Act) on the ground that the requisite approval in the prescribed form from the prescribed authority i.e., DSIR in form 3CL was not produced. Being aggrieved, the appellant filed appeal before the CIT(A), who vide order dt. 24-12-2014, dismissed the appeal on the ground that assessee had failed to produce form 3CL which is a condition mandatory for allowing deduction u/s. 35(2AB) of the Act.

3. Before us, it was argued by the Ld. Counsel that the required approval from the authority is still awaited and the assessee did all that which it could do in the matter and therefore, the matter may be restored to the file of the AO with a direction to allow the deduction as and when required approval is obtained and produced before the AO. On the other hand, Ld. DR has no serious objection to this submission.

4. Accordingly, after perusing the orders of lower authorities and other material on record, we remit the matter back to the file of AO with a direction to allow the weighted deduction under the provisions of :- 3 -: I.T.A.No. 288/Hyd/2015 M/s. Neo Seeds India Ltd.,

Section 35(2AB) as and when required approval is produced. We also appreciate the fact that the appellant had done what all it could be done in obtaining the approval, the appellant cannot be put to loss for the failure of statutory authorities to function within the prescribed time frame and hence, we feel that in the interest of justice, it is a fit case to restore the matter back to the file of AO.

5. In the result, the appeal is partly allowed for statistical purposes.

Order pronounced in open Court on 29th May, 2015

Sd/- Sd/-

(ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 29th May, 2015

TNMM

Copy to :

1. M/s. Neo Seeds India Limited, A-24/25, APIE Balanagar, Hyderabad. C/o. A.V. Raghu Ram, P. Vinod, Advocates, 610, Babukhan Estate, Basheerbagh, Hyderabad.

2. The Dy. Commissioner of Income Tax, Circle-16(1), Aayakar Bhavan, Basheerbagh, Hyderabad.

3. CIT(Appeals)-4, Hyderabad.

4. CIT-IV, Hyderabad.

5. D.R. ITAT, Hyderabad.

6. Guard File.