CBDT new guidelines for approval of agriculture project u/s 35CCC

In exercise of the powers conferred by section 295 read with section 35CCC of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (3rd Amendment) Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.
2.In the Income-tax Rules, 1962,—

(a) for rule 6AAD, the following rule shall be substituted, namely:—
"6AAD. Guidelines for approval of agricultural extension project under section 35CCC.—(1) The agricultural extension project shall be considered for notification if it fulfils all of the following conditions, namely :—

(i) the project shall be undertaken by an assessee for training, education and guidance of farmers;

(ii) the project shall have prior approval of the Ministry of Agriculture, Government of India; and

(iii) an expenditure (not being expenditure in the nature of cost of any land or building) exceeding the amount of twenty-five lakh rupees is expected to be incurred for the project.

(2) Before undertaking any agricultural extension project, an assessee shall make an application in Form No. 3C-0 to the Member (IT), Central Board of Direct Taxes for notification of such project under sub-section (1) of section 35CCC.

(3) The application referred to in sub-rule (2) shall be accompanied by the following, namely :—

(a) a detailed note on the agricultural extension project to be undertaken by the assessee;

(b) details of the expenditure expected to be incurred on the project and expected date of completion of the project; and

(c) a letter approving the project and specifying the amount of expenditure expected to be incurred on the project from the Ministry of Agriculture, Government of India.

(4) Where any defect is noticed in the application referred to in sub-rule (2) or a relevant document is not attached thereto, the Central Board of Direct Taxes shall, before the expiry of one month from the date of receipt of the application in its office, intimate the defect to the applicant for its rectification.

(5) The applicant shall remove the defect within a period of fifteen days from the date of such intimation or within such further period as may be extended by the Central Board of Direct Taxes, on an application made in this behalf by the applicant, so however, that the total period for removal of defect does not exceed thirty days, and if the applicant fails to remove the defect within such period as allowed, the Central Board of Direct Taxes shall pass an order treating the application as invalid.

(6) If the application form is complete in all respects, the Central Board of Direct Taxes shall, within a period of one month from the end of the month in which it receives the application form complete in all respects, issue under sub-section (1) of section 35CCC, a notification in Form No. 3CP to be published in Official Gazette specifying the agricultural extension project, subject to the conditions mentioned in rule 6AAE or such other conditions, as it may deem fit, to be effective for such period not exceeding three assessment years.

(7) The assessee, may, atleast two months before the expiry of the effective period of the notification issued under sub-rule (6), make an application to the Central Board of Direct Taxes for notification of such project for a further period.

(8) The Central Board of Direct Taxes shall, after receiving the application under sub-rule (7), call for a report from the Commissioner of Income-tax or the Director of Income-tax, as the case may be, having jurisdiction over the case regarding the activities of the agricultural extension project during the period of notification and fulfillment of conditions mentioned in rule 6AAE and any other conditions subject to which the agricultural extension project was notified under sub-rule (6).

(9) On being satisfied with the report received under sub-rule (8) on the agricultural extension project, the Central Board of Direct Taxes may, within a period of three months from the end of the month in which it receives application referred to in sub-rule (7), notify the said project for a further period not exceeding three assessment years.

(10) A copy of the notification issued under sub-rule (6) or, as the case may be, under sub-rule (9) shall be sent to the applicant, the Ministry of Agriculture, Government of India, the Commissioner of Income-tax or the Director of Income-tax, as the case may be, the Department of Agriculture of the concerned State and the Agricultural Technology Management Agency of the concerned District.

(11) The Central Board of Direct Taxes may, on being satisfied that the assessee has ceased its activities, or that its activities are not genuine or that its activities are not being carried out in accordance with all or any of the relevant provisions of the Act or this rule or rule 6AAE, or its activities are not being carried out in accordance with all or any of the conditions subject to which the notification was issued, pass an order for rescission of the notification issued under sub-rule (6) or sub-rule (9).

(12) Before any order is passed treating the application as invalid or rejecting it or rescinding the notification, an opportunity of being heard in the matter shall be given to the assessee.

(13) A copy of the order invalidating or rejecting the application or rescinding the notification shall be sent to the applicant, the Ministry of Agriculture, Government of India, the Commissioner of Income-tax or the Director of Income-tax, as the case may be, the Department of Agriculture of the concerned State and Agricultural Technology Management Agency of the concerned district.";

(b) in rule 6AAE —
(i) in sub-rule (2), for the words, brackets, figures and letters "notification issued under sub-rule (10) or sub-rule (11) of rule 6AAD", the words, brackets, figures and letters "notification issued under sub-rule (6) or sub-rule (9) of rule 6AAD" shall be substituted;

(ii) in sub-rule (7), for the words, brackets, figures and letters "for appropriate action as per the provisions of sub-rule (13) of rule 6AAD", the words, brackets, figures and letters "for appropriate action as per the provisions of sub-rule (11) of rule 6AAD" shall be substituted.
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