Conditions for notification of agricultural extension projects under section 47(1)(a)

Conditions for notification of agricultural extension projects under section 47(1)(a).

38. (1) The assessee undertaking an agricultural extension project (herein referred as the project) shall maintain separate books of account of the project notified under section 47(1)(a) and get such books of account audited by an accountant as defined under section 515(3)(b).

(2) The audit report referred to in sub-rule (1) shall include comments of the auditor on the true and fair view of the books of account maintained for the project, the genuineness of the activities of the project, and fulfilment of the conditions specified in the relevant provisions of the Act, the rules, or a notification issued under rule 37.

(3) The assessee shall not accept an amount exceeding the amount approved in the notification from the beneficiary under the eligible project for training, education, guidance, or any material distributed for such training, education or guidance.

(4) The assessee shall not derive any direct or indirect benefit from the notified project except for the deduction of eligible expenditure in accordance with section 47(1)(a), rule 37 and this rule.

(5) The expenses, eligible for deduction under section 47(1)(a), shall be all expenses incurred wholly and exclusively for undertaking an eligible project as reduced by—

(a) the amount received from the beneficiary;

(b) the cost of any land or building;

(c) any expenditure on the project that is reimbursed or reimbursable to the assessee by any person, whether directly or indirectly.

(6) The assessee shall, on or before the due date of furnishing the return of income under section 263(1), furnish the following to the Commissioner of Income-tax having jurisdiction over the assessee:—

(a) the audited statement of accounts of the project for the tax year along with the audit report and the amount of deduction claimed under section 47(1)(a);

(b) a note on the project undertaken during the tax year, the programme of the project to be undertaken during the current year, and the financial allocation for such programme; and

(c) a certificate from the Ministry of Agriculture and Farmers Welfare, Government of India, regarding the genuineness of the project undertaken by the assessee during the tax year.

(7) If it is found by the Commissioner of Income-tax that—

(a) the assessee has not maintained separate books of account for the project or has not got such books of account audited by an accountant in accordance with sub-rule (1); or

(b) the assessee has not furnished the documents referred to in sub-rule (6); or

(c) the assessee has ceased to carry out activities of the project; or

(d) the activities of the project of the assessee are not genuine; or

(e) the activities of the project are not being carried out in accordance with the relevant provisions of the Act, rules, or the conditions subject to which the notification was issued under rule 37, he may, after making appropriate inquiries, furnish a report on the circumstances referred to in clauses (a) to (e) to the Board for appropriate action as per the provisions of rule 37(11).