Prescribed authority and process of approval for expenditure on scientific research under section 45(3)(c)

Prescribed authority and process of approval for expenditure on scientific research under section 45(3)(c).

30. (1) For the purposes of section 45(3)(c)(i) to (iii), the head of the National Laboratory or the University or the Indian Institute of Technology, as the case may be, shall be the prescribed authority.

(2) For the purposes of section 45(3)(c)(iv), the Principal Scientific Adviser to the Government of India shall be the prescribed authority.

(3) The application for obtaining approval of scientific research programme under section 45(3)(c) shall be made by a sponsor in Form No. 7.

(4) The prescribed authority shall, if he is satisfied that it is feasible to carryout the scientific research programme then, subject to other conditions specified in this rule, pass an order in writing in Form No. 8, approving such programme within two months from the end of the month in which application is received, to be effective for such period not exceeding five tax years.

(5) For the purposes of sub-rule (4), the Principal Scientific Adviser to the Government of India may authorise an officer, not below the rank of a Deputy Secretary, to issue such order, after the scientific research programme has been approved by him.

(6) A reasonable opportunity of being heard shall be granted to the sponsor before rejecting an application.

(7) Approval of a scientific research programme under section 45(3)(c) shall be subject to the following conditions:—

(a) the programme should not relate purely to market research, sales promotion, quality control, testing, commercial production, style changes, routine data collection or activities of a like nature;

(b) the National Laboratory, University, Indian Institute of Technology or specified person, as the case may be, shall maintain a separate account for each approved programme;

(c) the account shall be audited annually and a copy thereof shall be furnished to the Chief Commissioner of Income-tax having jurisdiction over the sponsor on or before the due date specified in section 263(1)(c) for furnishing the return of income, for each succeeding tax year;

(d) the following information or statement or report shall be submitted to the Chief Commissioner of Income-tax having jurisdiction over the sponsor:––

(A) a report in Form No. 10 by the prescribed authority within a period of three months from the date of granting approval to the programme showing progress of implementation of the approved programme and actuals of expenditure incurred thereon, by the sponsor and the National Laboratory, University, Indian Institute of Technology or specified person, as the case may be;

(B) a completion certificate along with a copy of the report on the research activities carried out and salient features of the result obtained and its further application for commercial exploitation, jointly by the sponsor and the National Laboratory, University, Indian Institute of Technology or specified person, on completion of the approved programme;

(C) a copy of the audited statement of accounts for the approved programme, by the Head of the National Laboratory, University or Indian Institute of Technology or the Principal Scientific Adviser to the Government of India, within six months of the completion of the programme;

(e) the prescribed authority shall not extend the duration of the programme or approve any escalation in costs; and

(f) the assets acquired by the National Laboratory, University, Indian Institute of Technology or specified person, for executing the approved programme shall not be disposed of without the approval of the Chief Commissioner of Income-tax having jurisdiction over the sponsor.

(8) The National Laboratory, University, Indian Institute of Technology or specified person shall issue a receipt of payment for carrying out an approved programme of scientific research in Form No. 9.

(9) The sponsor, may, at least three months before the expiry of the effective period of the order passed under sub-rule (4), make an application to the prescribed authority for passing a fresh order.

(10) For the purposes of this rule,—

(a) "audited" means the audit of accounts by an accountant, as defined in the section 515(3)(b); and

(b) "sponsor" means a person who makes an application in Form No. 7.