R&D / agricultural extension / skill development (range 29–40)

Applying (sub-rules 1 to 5).

• Apply in Form No. 17 to the Commissioner of Income-tax having jurisdiction, at any time in the financial year immediately preceding the tax year from which approval is sought.
• Where approval is sought from tax year 2026-27, or from the tax year in which the applicant is incorporated, the application may be made at any time in that tax year.
• The person authorised to verify the return under section 265 verifies the form.
• A research association claiming exemption under Schedule III [Table: Sl. No. 23] also fills in the Annexure to Form No. 17.
• A copy goes to the Member (IT), Central Board of Direct Taxes, with the acknowledgement receipt.

Decision (sub-rules 6 and 7). The Central Government issues the notification, or passes an order rejecting the application with written reasons, within twelve months from the end of the quarter in which the application was received in the office of the Member (IT), CBDT. A notification has effect for a specified period of up to five tax years.

Defects and review (sub-rules 8 to 12). The Commissioner serves a deficiency letter before one month from the end of the month of receipt. The applicant has one month from the end of the month the letter is served to remove the deficiency; if it does not, the Commissioner recommends treating the application as invalid, and the Central Government may so order for reasons recorded in writing. If the application is complete, the Commissioner may inquire into the genuineness of the activity and send a recommendation before three months from the end of the quarter of receipt. The Central Government may call for documents or information and have an inquiry made.

Withdrawal and renewal (sub-rules 13 to 16). The approval can be withdrawn if the applicant has ceased its activities, its activities are not genuine, or they are not carried out according to the conditions in rule 33 or 34. No order invalidating, rejecting or withdrawing can be passed without a reasonable opportunity of being heard, and a copy goes to the applicant, the Assessing Officer and the Commissioner. The applicant may apply for a fresh notification at least three months before the effective period ends.