AJEET SEEDS PVT. LTD.,AURANGABAD vs. ACIT, CENTRAL CIRCLE-1, AURANGABAD

ITSSA 19/PUN/2025Status: DisposedITAT Pune27 April 2026AY 2016-1770 pages
AI SummaryAllowed

What were the facts?

The assessee, Ajeet Seeds Private Limited, is appealing an order from the CIT(A) Pune-12, which upheld the Assessing Officer's disallowance of weighted deduction under Section 35(2AB) of the Income Tax Act, 1961. This disallowance pertains to Assessment Year 2016-17. A search action under Section 132 was conducted on August 21, 2018, leading to a notice under Section 153A for AY 2016-17. The assessee claimed a weighted deduction of Rs. 32,35,74,524/- on research and development expenses. The Assessing Officer disallowed this claim because the assessee failed to submit Forms 3CM and 3CL, despite the facility being approved by the Department of Scientific and Industrial Research (DSIR) and the assessee submitting Form 3CK. The Assessing Officer allowed 100% of the actual revenue expenditure incurred for R&D.

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to the weighted deduction under Section 35(2AB) of the Income Tax Act, 1961. The Tribunal noted that the assessee's in-house research and development facility had been approved by DSIR and renewed periodically, including for the assessment year under consideration. The Tribunal found that the assessee had complied with the conditions regarding the approval of the facility and had submitted Form 3CK. The non-issuance of Forms 3CM and 3CL was attributed to a procedural lapse or delay on the part of DSIR, which was beyond the assessee's control. The Tribunal relied on judicial precedents that held that mere non-issuance of these forms by DSIR should not disentitle the assessee to the deduction for genuine R&D expenditure, especially up to AY 2016-17. The Tribunal observed that the contents of Form 3CM were largely similar to the regular renewal of recognition granted by DSIR. The Tribunal also noted that DSIR's consistency in issuing forms had been an issue in the past, with the assessee even having to approach the Delhi High Court. Therefore, the disallowance made by the Assessing Officer and confirmed by the CIT(A) was reversed, and the weighted deduction of Rs. 32,35,74,524/- was allowed. The effective grounds of appeal raised by the assessee were allowed.

What were the issues?

1. Whether the assessee is entitled to weighted deduction under Section 35(2AB) of the Income Tax Act, 1961, for Rs. 32,35,74,524/- when Forms 3CM and 3CL were not submitted to the revenue authorities, despite the in-house R&D facility being approved by DSIR. Assessee's Contention: The assessee argued that it had received approval from DSIR for its in-house R&D facility and had complied with all conditions laid down in Section 35(2AB), including filing Form 3CK. The non-receipt of Forms 3CM/3CL was a procedural lapse on the part of DSIR, which was beyond the assessee's control, and therefore, the claim should not be denied. Reliance was placed on various judicial pronouncements holding that procedural lapses do not disentitle the assessee to the deduction. Revenue's Contention: The revenue, through the Assessing Officer and CIT(A), contended that the non-furnishing of Forms 3CM, 3CLA, and 3CL was a failure to comply with the provisions of Rule 6(7A) of the Income Tax Rules, 1962, making the deduction inadmissible.

Which sections of the Income-tax Act were involved?

Section 35(2AB),Section 132,Section 153A,Section 143(2),Section 142(1),Section 35(1),Section 37(1),Section 288(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Pramod S Shingte
For Respondent: Shri Amol Khairnar
Hearing: 24.03.2026Pronounced: 27.04.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2016-17 is directed against the order dated 26.06.2025 framed CIT(A), Pune-12 arising out of Assessment Order dated 08.09.2021 passed u/s.153A of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Assessee has raised following grounds of appeal :

“1. On the facts and in the circumstances of the case and in law, learned AO erred in denying the claim of weighted deduction u/s 35(2AB) of Rs. 32,35,74,524/- on the erroneous ground that Form 3CM/3CL has not been submitted by DSIR in the case of the assessee company.

2.

On the facts and in the circumst

The order continues below.

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