Section 35(1)(ii) of the Income-tax Act, 1961 – Scientific research expenditure – Approved scientific research associations/institutions

Section 35(1)(ii) of the Income-tax Act, 1961 –
Scientific research expenditure – Approved scientific research
associations/institutions

NOTIFICATION NO. 56/2009,
DATED 9-7-2009

It is hereby notified for general information that the
organization Man Made Textile Research Association, Surat has been approved by
the Central Government for the purpose of clause (ii) of sub-section (1)
of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and
5E  of the Income- tax Rules, 1962 (said
Rules), with effect from 1-4-2008 in the category of ‘other institution, Partly
engaged in research activities subject to the following conditions, namely:-

(i)                 
The sums paid to the approved organization shall be utilized
for scientific research;

(ii)              

The approved organization shall carry out scientific research

through its faculty members or its enrolled students;

(iii)              

The approved organization shall maintain separate books of
account in respect of the sums received by it for scientific research, reflect
therein the amounts used for carrying out research, get such books audited by
an accountant as defined in the explanation to sub-section (2) of section 288
of the Said Act and furnish the report of such audit duly signed and verified
by such accountant to the Commissioner of Income-tax or the Director of
Income-tax having jurisdiction over the case by the due date of furnishing the
return of income under sub-section (1) of section 139 of the said Act;

(iv)             

The approved organization shall maintain a separate statement
of donations received and amounts applied for scientific research and a copy of
such statement duly certified by the auditor shall accompany the report of
audit referred to above.

The Central Government shall
withdraw the approval if the approval organization:-

(a)   >fails to
maintain separate books of accounts referred to in sub-paragraph (iii)
of paragraph 1; or

(b)   >fails to

furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or

(c)   >fails to furnish

its statement of the donations received and sums applied for scientific
research referred to in sub-paragraph (iv) of paragraph 1; or

(d)   >ceases to

carry on its research activities or its research activities are not found to be
genuine; or

(e)   >ceases to conform

to and comply with the provisions of clause (ii) of sub-section (1) of
section 35 of the said Act read with rules 5C and 5E of the said Rules.