Deduction claimed u/s 80IB(8A) could not be denied to assessee till such time assessee was approved as R&D organisation by prescribed authority.

 

Deduction Profits and gains from certain industrial undertakings other than infrastructure development undertakings Verification of certificates Assessee filed return of income claiming deduction u/s 80IB which was subsequently revised Assessee’s case was selected for scrutiny and accordingly, notices were issued During assessment proceeding, AO noted that in AYs 2005-06 and 2006-07, assessee claimed deduction u/s 10B on Clinical Pharmacology and Medicinal Chemistry Divisions and deduction claimed u/s 10B was disallowed During appellate proceeding, assessee took alternate ground that deduction should have been allowed u/s 80IB(8A) which was dismissed by CIT(A) Following same, AO disallowed deduction u/s 80IB(8A) on ground that assessee was not independently carrying on scientific research but was a contract researcher In present case, CIT(A) allowed assessee’s claim by following order of ITAT for subsequent AYs Held, ITAT in AYs 2005-06 and 2006-07 held that deduction claimed u/s 80IB(8A) could not be denied to assessee till such time assessee was approved as R&D organisation by prescribed authority Subsequently, ITAT for AYs 2008-09 allowed said deduction Further, in AYs 2009-10, 2010-11 and 2011-12, ITAT found that certificates issued by prescribed authority were renewed from time to time ITAT had stated that alleged claim had to be examined in each of years and left a note of caution that view taken therein might not apply to subsequent years, if there were change of facts However, as seen from approval granted, there were no change of facts and assessee was found to be eligible for deduction u/s 80IB Authorities were renewing certificates after verifying whether assessee was fulfilling requisite conditions  CIT(A), therefore, verified that prescribed authority had renewed certificate for AY 2012-13 and thereafter considered ITAT orders to grant relief to assessee Revenue’s appeal dismissed.

ITAT in AYs 2005-06 and 2006-07 held that deduction claimed u/s 80IB(8A) could not be denied to assessee till such time assessee was approved as R&D organisation by prescribed authority. Subsequently, ITAT for AYs 2008-09 allowed said deduction. Further, in AYs 2009-10, 2010-11 and 2011-12, ITAT found that certificates issued by prescribed authority were renewed from time to time. ITAT had stated that alleged claim had to be examined in each of years and left a note of caution that view taken therein might not apply to subsequent years, if there were change of facts. However, as seen from approval granted, there were no change of facts and assessee was found to be eligible for deduction u/s 80IB. Authorities were renewing certificates after verifying whether assessee was fulfilling requisite conditions. CIT(A), therefore, verified that prescribed authority had renewed certificate for AY 2012-13 and thereafter considered ITAT orders to grant relief to assessee.

DEPUTY COMMISSIONER OF INCOME TAX vs. GVK BIOSCIENCES PRIVATE LIMITED

(2019) 55 CCH 0156 HydTrib