Form 3CM and Form 3CL issued by DSIR is not  mandatory for allowing deduction u/s 35(1)(i) of Income Tax Act: ITAT quashes Revision Order [Read Order]

The Income Tax Appellate Tribunal (ITAT) Mumbai held that Form 3CM and Form 3CL issued by DSIR is not mandatory for allowing deduction under Section 35(1)(i) of Income Tax Act, 1961.Thus the bench quashed the revision order passed under Section 263 of the Income Tax Act, 1961 on the above ground .

Assessee,FDC Limited assessment was completed under Section 143(3) read with section 144B of the Income Tax Act. The PCIT examined the record  and took the view that the assessment order passed by the AO is erroneous and prejudicial to the interests of the revenue, since the Assessing Officer has allowed the following claims made by the assessee without carrying out due enquiries and verifications .

The PCIT observed that With regard to the deduction allowed under section 35(1)(i) of the Act, the said deduction was allowed by the AO without obtaining mandatory Form 3CM and Form 3CL issued by DSIR. Thereafter passing the assessment order  is erroneous and prejudicial to the interest of revenue.

Aggrieved by the order, the assessee filed an appeal before the tribunal

Before the benchCounsel for the revenue submitted that deduction was allowed by the AO without obtaining mandatory Form 3CM and Form 3CL issued by DSIR.

Counsel for the assessee submitted that the provisions of sec.35 of the Income Tax  Act and submitted that the above said Form 3CM and 3CL are applicable to the deduction claimed under Section 35(2AB) of the Income Tax Act only, i.e. the above said forms are not required for allowing deduction under Section  35(1)(i) of the Income Tax Act. 

After carefully analysing the material facts the two member bench of  Rahul Chaudhary , (Judicial Member )and B.R. Baskaran ,( accountant Member ) held that  Form 3CM and Form 3CL issued by DSIR is not mandatory for allowing deduction under Section 35(1)(i) of Income Tax Act.

Dr. K. Shivram, counsel appeared for assessee and Ankush Kapoor , counsel appeared for the revenue

To Read the full text of the Order CLICK HERE

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