Expenditure on scientific research

The petitioner (assessee) has the filed present writ petition seeking the quashing of the order dated 30 September 2010 and directing the CBDT to grant the renewal of approval under s 35(1)(iii) of the Income Tax Act, 1961 for the period from 1 April 2006 onwards. The assessee’s main contention is that sufficient opportunity had not been given to put forth its submissions to the CBDT, as no opportunity of personal hearing had been given to it, as per r 5C(12) of the Income Tax Rules, 1962.

The issue is whether the CBDT is required to give opportunity of personal hearing before rejecting the assessee’s application under s 35(1)(iii).

The CBDT admitted that no opportunity of personal hearing had been given to the petitioner, as per r 5C(12) of the Income Tax Rules, 1962. In such circumstances, the impugned order of the is set aside. The petitioner is permitted to produce all the necessary documents in support of its claims, before the CBDT, within a period of four weeks from the date of receipt of a copy of this order. On production of such documents, the first respondent shall pass appropriate orders thereon, on merits and in accordance with the law.

Approval/withdrawal under s 35(1)(iii) — Opportunity of personal hearing to be given to assessee before rejecting application for withdrawal of approval under s 35(1)(iii) as held by ChenHC in Research Foundation of Jainology v CBDT and Others — In favour of: The Assessee ; Writ Petition No. 1619 of 2011 and M.P. Nos. 1 and 2 of 2011

Decided on: 6 April 2011