DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE BAREILLY, AAYKAR BHAWAN vs. G SURGIWEAR LIMITED, VILLAGE RASOOLPUR

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW “A”BENCH, LUCKNOW BEFORE SH. KUL BHARAT, VICE-PRESIDENT AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.978/Lkw/2026 A.Y. 2016-17 DCIT, Central Circle, G. Surgiwear Limited, Aayakar Bhawan, Village Rasoolpur, Jahangaj, Kamla Nehru Marg, vs. Shahjahanpur, Bareilly, Uttar Pradesh-242001. Uttar Pradesh-243001. PAN: AAACG7035J (Appellant) (Respondent) Assessee by: None Revenue by: Shri B. Shriniwas Kumar, CIT-DR Date of hearing: 15.10.2026 Date of pronouncement: 29.10.2026

O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the department against the order of the ld. CIT (Appeals)-3, Lucknow dated 02.06.2026, wherein the learned CIT(A) had partly allowed the appeal of the assessee that was filed against the assessment order under section 143(3) of the Income Tax Act, 1961 (the Act), for the AY 2016-17 dated 31.12.2018. The grounds of appeal are as under:- “(i). On the facts and in circumstances of the case and in law Ld. Commissioner of Income Tax (Appeals) has erred in allowing deduction under Section 35(2AB) despite the assessee's failure to comply with mandatory statutory conditions, namely Approval in Form 3CM; and Quantification of expenditure in Form 3CL.

ITA No. 978/Lkw/2026 G. Surgiwear Limited

(ii). On the facts and in circumstances of the case and in law Ld. Commissioner of Income Tax (Appeals) has erred in treating the substantive conditions of Rule 6(7A) of the Income Tax Rules, 1962 as procedural formalities and in absence of compliances allowed the deductions under section 35(2AB) of the Act. (iii). On the facts and in circumstances of the case and in law Ld. Commissioner of Income Tax (Appeals) has erred in treating the "renewal letter" signed by Scientist-G as valid statutory approval although it was neither in the prescribed format nor issued by the competent authority as per Rule 6, therefore, the basic eligibility condition itself remains unfulfilled. (iv). On the facts and in circumstances of the case and in law Ld. Commissioner of Income Tax (Appeals) has erred inholding that the assessee is not responsible for production of Form 3CL, whereas it is a settled principle of law that the burden to substantiate a claim of deduction lies on the assessee. (v). On the facts and in circumstances of the case and in law Ld. Commissioner of Income Tax (Appeals) has erred in invoking section 35(3) of the Act to hold that the AO should have referred the matter to CBDT, whereas section 35(3) applies only where a technical question arises regarding nature of research. (vi). On the facts and in circumstances of the case and in law Ld. Commissioner of Income Tax (Appeals) has erred in placing his reliance on subsequent issuance of Form 3CL whereas the allow ability of deduction must be determined based on material available at the time of assessment and subsequent compliance cannot cure initial defects unless duly verified in accordance with law. (vii). The appellant craves leave to add, alter, amend or withdraw any ground of appeal at the time of hearing with the prior permission of the Hon'ble ITAT. ”

ITA No. 978/Lkw/2026 G. Surgiwear Limited Department may be permitted to withdraw this appeal without prejudice to its right to pursue ITA No. 964/Lkw/2026.

Sd/- Sd/- [KUL BHARAT] [NIKHIL CHOUDHARY] VICE-PRESIDENT ACCOUNTANT MEMBER DATED: 29/10/2026 SK, Sr. PS Copy forwarded to: 1. Appellant – 2. Respondent – 3. CITDR , ITAT, 4. CIT, 5. The CIT(A) By order SHARWAN Digitally signed by SHARWAN KUMAR KUMAR Date: 2026.11.02 11:09:40 +05'30' Sr. P.S.