CBDT issues few clauses for sec. 35 relief

The Central Government has approved M/s Institute of Nano Science and Technology, Mohali (PAN:- AAAAI4829E) for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5D of the Income-tax Rules, 1962 (said Rules), from the assessment year 2018-19 onwards in the category of ‘Scientific Research Association’. Following conditions will be applied to the clause:

1. Scientific research shall be the sole purpose of the approved ‘Scientific Research Association’ and it will carry out all scientific research by itself.

2. The approved organization will have to maintain separate books of account for all the sums received by it for scientific research and get them audited by an accountant as defined in the explanation to sub-section (2) of section 288 of the said Act. The report should be signed and verified by the same accountant and then submitted to the Commissioner of Income-tax or the Director of Income-tax who has jurisdiction over the case before the due date under sub-section (1) of section 139 of the said Act.

3. The approved organization will also have to maintain a separate statement of donations received and how much was spent on scientific research. A copy of the report, certified by the auditor should be submitted along with the report of audit referred above

4. The approved organization should also submit a statement to the Commissioner of Income-tax or Director of Income-tax that contains the following in detail:

  • Any research work was undertaken during the previous year
  • All research articles published in national or international journals during the year
  • Any patent or other similar rights were applied or registered during the year
  • A list of programmes of research projects to be undertaken during the forthcoming year and their financial allocation

5. In case of the following discrepancies, the Central Government shall withdraw the approval:

  • If the organization fails to maintain separate books of account as mentioned above
  • If it fails to submit its audit report as mentioned above
  • If it fails to submit its report of the donations received and details of the amount used for scientific research
  • If  its research activities are not genuine
  • If it does not carry on its research activities
  • If it fails to adhere to clause (ii) of sub-section (1) of section 35 of the said Act read with rules 5C and 5D of the said Rules

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