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

Authority. The Chief Commissioner of Income-tax having jurisdiction over the applicant (sub-rule 1).

Procedure (sub-rule 2).

• Apply in Form No. 17 to the jurisdictional Commissioner in the financial year before the tax year from which approval is sought; for approval from tax year 2026-27 or from the year of incorporation, the application may be made at any time in that tax year.
• The authorised return-verifier under section 265 verifies the form; a copy with the acknowledgement goes to the prescribed authority.
• An order of approval, or an order rejecting the application, is passed within twelve months from the end of the quarter in which the application was received.
• A deficiency letter is served within one month from the end of the month of receipt, and the applicant removes the deficiency within one month from the end of the month it is served; otherwise the Commissioner recommends treating the application as invalid and the Chief Commissioner may so order.
• The Commissioner may inquire into genuineness and recommend within three months from the end of the quarter of receipt; the Chief Commissioner may call for documents or information.
• The approval may be withdrawn if the company has ceased its activities, they are not genuine, or they are not carried on in accordance with the conditions. No adverse order is passed without a reasonable opportunity of being heard, and a copy goes to the applicant, the Assessing Officer and the Commissioner.
• An order has effect for a specified period of up to five tax years; a fresh order may be applied for at least three months before expiry.

Conditions of approval (sub-rule 3). Sums paid to the company are used for scientific research; the company carries on the research through its own employees using its own assets; it keeps separate audited books and furnishes the audit report by the return due date under section 263(1)(c); it keeps a separate, auditor-certified statement of donations received and amounts used; and each year it furnishes the research-note, publications, patents and forward-programme statement. If the Commissioner finds defaults, a report goes to the jurisdictional Chief Commissioner within six months from the date of furnishing the return under section 263(1).