DSIR Registration is Sufficient to Claim Deduction u/s 35 (2AB) for Cases Prior to Clause (b) Rule 6(7A) Amendment: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has recently, in an appeal filed before it, held that DSIR registration is sufficient to claim deduction under Section 35 (2AB) of the Income Tax Act, for cases prior to amendment of clause (b) of Rule 6(7A) of the Income Tax Rules.

The aforesaid observation was made by the Pune ITAT, when an appeal was preferred before it by the assessee, as against the order dated 31-01-2023, passed by the Commissioner of Income-tax (Appeals), Pune, for assessment year 2016-17.

The only issue raised by the assessee  in the appeal being as to whether the CIT(A) can be justified in confirming the disallowance made by the AO on account of weighted deduction under Section 35(2AB) of the Income Tax Act, at the outset, both the parties conceded that the issue raised in the appeal is covered in favour of the assessee for the reason that non-applicability of the amendment is carried out to Clause (b) of Rule 6(7A) w.e.f. 01-07-2016 for the year under consideration i.e. A.Y. 2016-17.

Hearing the submissions of Shri Sharad Shah and Rohit S Tapadiya, on behalf of the assessee and by Shri Ramnath P Murkunde, on behalf of the Revenue, the Pune ITAT observed, “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 under Section 35(2AB) of the Income Tax Act irrespective of the fact that some amount was not approved by the DSIR.”

Finally, the ITAT Coram of R.S. Syal, the Vice -President, and S.S. Viswanethra Ravi, the Judicial Member thus held and concluded:

“Therefore, the assessment year is being 2016-17, which stands prior to amendment i.e., w.e.f. 01-07-2016, we hold that the assessee is entitled to claim deduction under Section. 35(2AB) of the Income Tax Act. Thus, the order of CIT(A) is not justified and it is set aside.”

To Read the full text of the Order CLICK HERE

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