DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE, PUNE vs. AMERICHEM POLYMERS INDIA PRIVATE LIMITED , PUNE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.397/PUN/2026 िनधा�रण वष� / Assessment Year : 2018-19 DCIT, Circle-1(1), Pune. Vs. Americhem Polymers India Private Limited, Gat No.1162, Pirangut, Taluk-Mulshi, Dist. Pune, Pune- 412115. PAN : AADCP9591P Appellant Respondent Revenue by Shri Dayanand Jawalikar (Virtual) : Assessee by : Shri Sharad A. Shah & Shri Rohit S. Tapadiya Date of hearing : 14.05.2026 Date of pronouncement 28.07.2026 : आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the Revenue is directed against the order dated 22.11.2025 passed by Ld. CIT(A), Pune-11 [‘Ld. CIT(A)’] for the assessment year 2018-19. 2. The Revenue has raised the following grounds of appeal :- “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) is not justified by ignoring the fact that allowing the weighted deduction of Rs.2,12,78,477/- under section 35(2AB) of the Income-tax Act, 1961, despite the fact that the mandatory

2 ITA No.397/PUN/2026 approval/report in Form 3CL from the prescribed authority (DSIR) was not available within the prescribed time as required under Rule 6(7A) of the Income-tax Rules, 1962. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) is not justified by ignoring the fact that as per section 35(2AB) read with section 35(4) of the Act, submission of the report in Form 3CL by the prescribed authority to the DGIT (Exemptions) is a statutory and mandatory condition for allowing weighted deduction, and in the absence thereof, no such deduction can be granted. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) is not justified by ignoring the fact that relying upon Form 3CL issued subsequently, without appreciating that the eligibility for deduction under section 35(2AB) has to be examined with reference to the facts and evidences available at the time of completion of assessment, and not on the basis of post-assessment compliance, therefore, the order of the Assessing Officer disallowing the weighted deduction of Rs.2,12,78,477/- under section 35(2AB) deserves to be restored. 4. The appellant craves to add amend, alter or delete the above grounds of appeal during the course of appellate proceeding before the Hon'ble Tribunal.” 3. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacturing and export of custom master batches and single color concentrate for textile and specialty plastics customers & has furnished its return of income by declaring income of Rs.Nil after claiming deduction u/s 35(2AB) of the IT Act in respect of research & development expenditure. The case was selected for scrutiny and notice u/s 143(2) and 142(1) respectively were issued to the assessee. While examining assessee’s claim of deduction, the Assessing Officer

3 ITA No.397/PUN/2026 observed that in the light of amended Rule 6(7) of the Income Tax Rules, the assessee has not submitted Form 3CL i.e. approval from the DSIR & therefore, in absence of Form 3CL issued by the competent authority, assessee’s claim of deduction u/s 35(2AB) of the IT Act was disallowed and restricted to the extent of 100% of revenue expenditure incurred i.e. of Rs.4,25,56,954/- instead of 150% of Rs.6,38,35,431/- claimed by the assessee u/s 35(2AB) of the IT Act. Accordingly, vide order dated 14.04.2021, the Assessing Officer completed assessment u/s 143(3) of the IT Act by determining the income of the assessee at Rs.2,12,78,477/- as against income of Rs.Nil returned by the assessee. The above assessed income includes addition of Rs.2,12,78,477/- (6,38,35,431 – 4,25,56,954) on account of disallowance of deduction claimed u/s 35(2AB) of the IT Act. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A). After considering the reply and submissions of the assessee and in the light of the fact that subsequently Form 3CL i.e. approval from DSIR was issued and received by the assessee, Ld. CIT(A) allowed the

4 ITA No.397/PUN/2026 deduction of Rs.2,12,78,477/- claimed by the assessee u/s 35(2AB) of the IT Act by observing as under :- “8.2 During the appellate proceedings, it was submitted that the assessee had an approved in-house research and development facility centre eligible for deduction under section 35(2AB) of the Act. During the year, the assessee had incurred R&D expenses (revenue & capital) of Rs. 4,25,56,954/- and claimed deduction of Rs. 6,38,35,431/- u/s 35(2AB) being 150% deduction allowable under this section. The assessee had CA certificate duly certifying the amount claimed as deduction u/s 35(2AB) for AY 18-19 in Form 3CLA (Copy of Form 3CLA is attached as Annexure) and also received the Form 3CL where DSIR authority has approved our entire expenditure as detailed in below table. Particulars Incurred (*) (as Amount claimed Amount approved per CA ITR u/s 35(2AB) by DSIR authority certificate) being 150% Revenue 3,87,70,414 5,81,55,621 3,87,70,414 Expenditure Debited to Profit & Loss Account Capital expenditure 37,86,540 56,79,810 37,86,540 eligible for deduction u/s 35(1)(iv) Total Expenditure 4,25,56,954 6,38,35,431 4,25,56,954 Therefore, it was prayed to allow the deduction claimed u/s 35(2AB) and delete the disallowance of Rs.2,12,78,477/-. 8.3 In the remand report, the Assessing Officer has objected to allow the claim of weighted deduction u/s 35(2AB) on the ground that as per condition of the provisions of sub-section (4) of section 35 of the Act, submission of report in form 3CL by Prescribed authority to DGIT (Exemptions) within the prescribed time limit is mandatory and during assessment proceeding, the assessee had not provided the form 3CL. 8.4 I have considered the above submission of the Assessing Officer. In my opinion, the appellant in the present case has discharged his obligations within prescribed time by filing the Form- 3CLA. The DSIR which is the prescribed authority for issuing Form- 3CL is a government authority and the appellant does not have any control over the issuance of Form-3CL by DSIR. In my opinion,

5 ITA No.397/PUN/2026 weighted deduction u/s 35(2AB) cannot be denied merely on the ground that the Form-3CL was issued by DSIR beyond the time prescribed in Rule 6(7A)(ba) of I.T. Rules. Violation of Rule 6(7A), if any, is committed by DSIR and not by the appellant. 8.5 An identical situation has been dealt by Hon. ITAT, Delhi Bench in the case of Indian Tonners and Developers Ltd vs ACIT ITA No.2841/Del/2022(Delhi - Trib.) (AY 2018-19)wherein the Hon. Tribunal vide order dated 16/05/2023, has held that the assessee is entitled for deduction u/s 35(2AB) of the Act, on the basis of Form3CL issued by the DSIR after the completion of assessment but before completion of first appellate proceedings. The relevant portion of this decision is as under: “6. We have considered rival submissions and perused the materials on record. As per Assessing Officer’s own admission, in course of assessment proceeding the assessee did furnish Form 3CLA and Form 3CK for the impugned assessment year. Even, Form 3CL issued by the competent authority for assessment year 2017-18 was furnished. Only because Form 3CL for assessment year 2018-19 was not furnished, the Assessing Officer disallowed assessee’s claim of weighted deduction under section 35(2AB) of the Act. However, there cannot be any doubt regarding the genuineness of the expenditure claimed as the Assessing Officer has allowed 100% deduction of revenue expenditure related to research and development. He has only disallowed the excess deduction claimed under section 35(2AB) of the Act. Pertinently, after completion of assessment the assessee did receive Form 3CL issued by the competent authority for assessment years 2018- 19, 2019-20 and 2020-21, which was furnished before the first appellate authority. 7. As could be seen from the perusal of Form 3CL, it was issued by the competent authority on 31st March, 2022, which is post completion of assessment but before order was passed by the first appellate authority. Surprisingly, while deciding the appeal, the first appellate authority has completely ignored Form 3CL issued by the competent authority, though, it was placed on record. This, in our view, is unacceptable. When the competent authority has issued Form 3CL entitling the assessee to claim deduction in respect of both capital and revenue expenditure, which is a mandate under section 35(2AB) of the Act, the departmental authorities cannot disentitle the assessee from availing the deduction by ignoring Form 3CL. Hence, disallowance of Rs.29,05,724/-, is unsustainable. Accordingly, we delete the disallowance. Grounds raised are allowed.”

6 ITA No.397/PUN/2026 8.6 Hon. ITAT, Ahmedabad Bench in the case of Schaeffler India Ltd. vs PCIT [2023] 150 taxmann.com 528 (Ahmedabad - Trib.) has held that merely because the DSIR has failed to send the requisite Form-3CL to the department would not be reason enough to disallow the claim u/s 35(2AB) of the Act. The relevant portion of the said decision is as under: “7.1 In view of the above, we observe that in the instant case, the assessee had filed copy of recognition of the in-house R&D facility dated 25-8-2014 during the course of assessment. The assessee had also filed copy of approval of the in-house R&D facility dated 7-10-2015 in Form 3CM during the course of assessment, with regard to computation of deduction u/s. 35(2AB) of the Act, the assessee had filed certificate of the auditor certifying the expenditure during the course of assessment. With respect to Form 3CL, we observe that the Form 3CL was issued by prescribed authority on 20-7-2021 after passing of the assessment order u/s. 143(3) of the Act on 17-1-2020. However, the approval of the R&D facility in Form 3CM was duly filed by the assessee during the course of assessment vide letter dated 9-12-2019. Therefore, looking into the facts of the case and the judicial precedents on the subject, which have held that once the assessee files Form 3CM certifying that the research and development facility has been approved by the prescribed authority in proper Format, merely because the said authority failed to send intimation to the Department in form 3CL, would not be reason enough to deprive assessee's claim of deduction u/s. 35(2AB) of the Act.” 8.7 In view of above discussion and case-laws, it is held that the appellant cannot be made to suffer merely because the DSIR issued the Form-3CL beyond the prescribed period of 120 days, especially when the appellant has discharged its responsibility in time by filing Form-3CLA. Since the Form-3CL has now been issued by DSIR, the appellant is entitled to weighted deduction u/s 35(2AB) of the Act. The grounds no. 1 and 2 are therefore allowed.” 5. It is the above order against which the Revenue is in appeal before this Tribunal. 6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished

7 ITA No.397/PUN/2026 by the assessee. In this regard, we find that while allowing the appeal of the assessee, Ld. CIT(A) has relied on coordinate bench decision passed in the case of Schaeffler India Ltd. vs. PCIT [2023] 150 taxmann.com 528 (Ahmedabad- Trib.), which was subsequently affirmed by Hon’ble Gujarat High Court in the case of PCIT vs. Schaeffler India Ltd, 155 Taxman 651 (Gujrat) wherein Hon’ble Court dismissed the appeal filed by the Revenue by observing as under :- 6. In view of above it is not in dispute that the assessee at the time of original assessment has filed a copy of recognition of in-house R&D facility dated 25-8-2014. The assessee also filed the approval of in-house R&D facility dated 7-10-2015 in Form 3CM during the course of assessment with regard to the computation of deduction under section 35(2AB) of the Act. The assessee also filed certificate of the auditor certifying the expenditure during the course of assessment proceedings. With regard to Form 3CL, the same was issued by the prescribed authority on 20-7-2021 which was after passing of the assessment order under section 143(3) of the Act, and therefore, the assessee could not produce the same on or before the assessment order. Further, Form 3CL was duly filed by the assessee during the course of assessment vide letter dated 9-10-2019. Therefore, since the assessee has filed Form 3CL certifying his Research and Development (R&D) facility approved by the prescribed authority in proper format, merely because the authority failed to send the intimation during the course of assessment proceedings could not be the reason for denying the claim deduction under section 35(2AB) of the Act. The ITAT in our opinion is correct in holding that the order of the A.O. is not erroneous and prejudicial to the interest of revenue. 7. In view of above, we do not find any error of fact and law in the order of Tribunal. The present Tax Appeal is therefore dismissed since no substantial question of law is involved.”

8 ITA No.397/PUN/2026 7. Apart from above, we also find support from a coordinate bench decision passed in the case of Indian Tonners and Developers Ltd. vs. ACIT order dated 16.05.2023 for assessment year 2018-19 in ITA No.2841/Del/2022, wherein, under exactly identical facts the Tribunal allowed the deduction u/s 35(2AB) of the IT Act by observing as under :- “7. As could be seen from the perusal of Form 3CL, it was issued by the competent authority on 31st March, 2022, which is post completion of assessment but before order was passed by the first appellate authority. Surprisingly, while deciding the appeal, the first appellate authority has completely ignored Form 3CL issued by the competent authority, though, it was placed on record. This, in our view, is unacceptable. When the competent authority has issued Form 3CL entitling the assessee to claim deduction in respect of both capital and revenue expenditure, which is a mandate under section 35(2AB) of the Act, the departmental authorities cannot disentitle the assessee from availing the deduction by ignoring Form 3CL. Hence, disallowance of Rs.29,05,724/-, is unsustainable. Accordingly, we delete the disallowance. Grounds raised are allowed. 8. In the result, appeal is allowed.” 8. Respectfully following the above coordinate bench decision passed in the case of Indian Tonners and Developers Ltd. vs. ACIT order dated 16.05.2023 for assessment year 2018-19 in ITA No.2841/Del/2022, we do not find any error in the order passed by Ld. CIT(A) wherein deduction u/s 35(2AB) of the IT Act was allowed to the assessee. Accordingly, the order passed by Ld.

9 ITA No.397/PUN/2026 CIT(A) is hereby confirmed and the grounds of appeal raised by the Revenue fails. 9. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on this 28th day of July, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 28th July, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.07.29 11:14:16 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), Pune-11. 4. The Pr. CIT/CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.