285. Procedure to be adopted for dealing with pending as well as fresh applications for approval under section 35(1)(ii)/(iii)
Circular No. 778 was issued by the Central Board of Direct Taxes on 20 August 1999. Its subject is 285. Procedure to be adopted for dealing with pending as well as fresh applications for approval under section 35(1)(ii)/(iii).
This is an approval of a named institution. It affects that institution and the people who deal with it; the years it covers are stated in it and are the whole of its reach.
Sets out who deals with applications for approval under sections 35(1)(ii) and 35(1)(iii) after the Finance Act, 1999 moved the power from the prescribed authority to the Central Government, with consequential changes to rule 6 and Form No. 3CF notified on 25 June 1999. Fresh applications for assessment year 2000-01 onwards go in Form No. 3CF to the Central Government. Applications pending with the Director General of Income-tax (Exemption) on 25 June 1999 for assessment year 2000-01 or later stand transferred to the Central Government. That Director General, in concurrence with the Secretary, Department of Scientific and Industrial Research, remains the prescribed authority for assessment year 1999-2000 and earlier years. Approvals already granted by the prescribed authority before 25 June 1999 for assessment year 2000-01 or later remain valid for those years and need no fresh notification or approval from the Central Government.
The Finance Act, 1999 shifted the approving authority and rule 6 and Form No. 3CF were amended accordingly, so the handling of pending and fresh applications had to be settled.
285. Procedure to be adopted for dealing with pending as well as fresh applications for approval under section 35(1)(ii)/(iii)
1. The Finance Act, 1999, has made amendment in section 35(1) of the Income-tax Act, 1961, by which the approval under section 35(1)(ii) and section 35(1)(iii) of the Income-tax Act shall be granted by the Central Government instead of prescribed authority [Director General of Income-tax (Exemption), in concurrence with Secretary, Department of Scientific and Industrial Research]. Subsequently consequential changes have also been made in rule 6 of the Income-tax Rules, 1962 and Form 3CF vide Gazette Notification dated 25-6-1999.
2. It has been now decided that henceforth, the following procedure shall be adopted for dealing with the pending as well as fresh applications for approval under section 35(1)(ii) and 35(1)(iii) of the Income-tax Act, 1961:
(i) Fresh application for approval under sections 35(1)(ii) and 35(1)(iii) for assessment year 2000-2001 onwards shall be filed in Form 3CF with Central Government.
(ii) All applications pending with DGIT(E) as on 25-6-1999, i.e., the date of Gazette Notification of amendment of rule 6 of the Income-tax Rules, 1962, for approval under sections 35(1)(ii) and 35(1)(iii) pertaining to assessment year 2000-2001 or subsequent year shall stand transferred to Central Government.
(iii) DGIT(E) in concurrence with Secretary, Department of Scientific and Industrial Research shall continue to be the prescribed authority for approval of cases under sections 35(1)(ii) & 35(1)(iii) pertaining to assessment year 1999-2000 or any earlier year.
(iv) Approval already granted by the prescribed authority under pre-amended sections 35(1)(ii) and 35(1)(iii) for assessment year 2000-2001 or any subsequent year, prior to 25-6-1999, i.e., the date of Gazette of amendment of rule 6 of the Income-tax Rules, 1962, shall continue be valid and no further notification or approval from Central Government shall be required in such cases for those assessment years.
Circular: No. 778, dated 20-8-1999.
When a research institution's approval for a year around 2000-01 is questioned, or when an old application's transfer to the Central Government is traced.
Rules it names. Rule 6 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
Source: the Income Tax Department’s own published text — its page for this instrument.