Income-tax
(Tenth Amendment) Rules, 2013 - Insertion of Rules 6AAF, 6AAG, 6AAH and Form
Nos. 3CQ & 3CR
Notification No. 54/2013,
[F.NO.142/29/2012-SO(TPL)/SO 2166(E), dated 15.07.2013
In exercise of
the powers conferred by section 295 read with sub-section (2) of section 35CCD
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 (10th Amendment) Rules, 2013.
(2) They shall come into force on the date
of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereafter referred to as
the said rules), after rule 6AAE, the following shall be inserted, namely:—
'6AAF. Guidelines for approval of
skill development project under section 35CCD.—
(1) A skill development project shall be
considered for notification if it is undertaken by an eligible company and the
project is undertaken in separate facilities in a training institute.
(2) The eligible company, before
undertaking any skill development project, shall make an application for
notification of such project under sub-section (1) of section 35CCD, in
duplicate, in Form No. 3CQ, to the National Skill Development Agency
(hereinafter referred to as the NSDA).
(3) The eligible company shall also send
a copy of the application in Form No. 3CQ to the Commissioner of Income-tax or
the Director of Income-tax, as the case may be, having jurisdiction over the
case, accompanied by the acknowledgement receipt as evidence of having furnished
the application form in duplicate to the NSDA.
(4)
The application shall be accompanied by the following, namely:—
(a) detailed note on the skill
development project to be undertaken by the eligible company;
(b) details of the expenditure
expected to be incurred on the project and expected date of completion of the
project; and
(c) a letter of concurrence from
the training institute in which the skill development project is to be
undertaken.
(5) If any defect is noticed in the
application referred to in sub-rule (2) or if any relevant document is not
attached thereto, the NSDA 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.
(6) The applicant shall remove the
defect within a period of fifteen days from the date of such intimation or
within such further period as, on an application made in this behalf, may be
extended by the NSDA, so however, that the total period for removal of the
defect does not exceed thirty days, and if the applicant, fails to remove the
defect within such period so allowed, the NSDA shall send its recommendation
for treating the application as invalid to the CBDT.
(7) On receipt of recommendation of the
NSDA under sub-rule (6) the CBDT, if satisfied, may pass an order treating the
application as invalid.
(8) If the application form is complete
in all respects, the NSDA may make such inquiry or call for such documents from
the eligible company or the training institute as it may consider necessary for
satisfying itself regarding the genuineness of the current and proposed
activity of the applicant and send its recommendation to the CBDT for grant of
approval or rejection of the application before the expiry of the period of two
months to be reckoned from the end of the month in which the application form
complete in all respects was received in its office.
(9) The Commissioner of Income-tax or
the Director of Income-tax, as the case may be, having jurisdiction over the
case shall send his recommendation to the NSDA for grant of approval or rejection
of the application, after considering the compliance of the applicant with the various
provisions of Income-tax Act, 1961 and Wealth-tax Act, 1957, before the expiry
of the period of one month to be reckoned from the end of the month in which
the copy of the application was received in his office.
(10) If the NSDA recommends the grant of
approval under sub-rule (8), the CBDT shall, within a period of fifteen days
from the end of the month in which it receives the report from the NSDA, under
sub-section (1) of section 35CCD, issue a notification in Form No. 3CR to be published
in the Official Gazette specifying the skill development project subject to
conditions mentioned in rule 6AAG or such other conditions, as it may deem fit,
to be effective for such period not exceeding three assessment years and if the
NSDA recommends the rejection of the application under sub-rule (8), the CBDT
shall pass an order rejecting the application.
(11) If the CBDT is satisfied with the
activities of the skill development project during the period of notification,
it may notify the said project for a further period in consultation with the
NSDA.
(12) A copy of the notification issued
under sub-rule (10) or sub-rule (11) shall be sent to the applicant, the NSDA,
the training institute and the Commissioner of Income-tax or the Director of
Income-tax, as the case may be, having jurisdiction over the case.
(13) The CBDT may rescind the
notification issued under sub-rule (10) or sub-rule (11) at any time, if it is
satisfied that the eligible company or the training institute, as the case may
be, has ceased its activities or its activities are not genuine or the
activities of the skill development project are not being carried out in
accordance with all or any of the relevant provisions of the Act or this rule
or rule 6AAG or the conditions subject to which the notification was issued.
(14) An order rescinding the
notification shall not be passed unless the applicant has been given an
opportunity of being heard in the matter.
(15) A copy of any order invalidating or
rejecting the application or rescinding the notification shall be sent to the
applicant, the training institute, the NSDA and the Commissioner of Income-tax
or the Director of Income-tax, as the case may be, having jurisdiction over the
case.
6AAG. Conditions subject to which a
skill development project is to be notified under section 35CCD.—
(1) The company undertaking skill development
project shall maintain separate books of account of the skill development
project notified under sub-section (1) of section 35CCD, and get such books of
account audited by an accountant as defined in the Explanation below
sub-section (2) of section 288.
(2) The audit report referred to in
sub-rule (1) shall include the comments of the auditor on the true and fair
view of the books of account maintained for skill development project, the
genuineness of the activities of the skill development project and fulfilment
of the conditions specified in the relevant provisions of the Act or the rules
or the conditions mentioned in the notification issued under sub-rule (10) or
sub-rule (11) of rule 6AAF.
(3) A skill development project in
respect of existing employees of the company shall not be eligible for
notification under sub-section (1) of section 35CCD, where the training of such
employees commences after six months of their recruitment.
(4) All expenses (not being expenditure
in the nature of cost of any land or building), incurred wholly and exclusively
for undertaking a notified skill development project shall be eligible for deduction
under section 35CCD:
Provided that any
expenditure incurred on the skill development project which is reimbursed or reimbursable
to the company by any person, whether directly or indirectly, shall not be
eligible for deduction under section 35CCD.
(5) The company shall, on or before the
due date of furnishing the return of income under sub-section (l) of section
139, furnish the audited statement of accounts of the skill development project
for the previous year along with the audit report and amount of deduction
claimed under sub-section (1) of section 35CCD to the Commissioner of
Income-tax or the Director of Income-tax, as the case may be.
(6)
If the Commissioner of Income-tax or the Director of Income-tax, as the case
may be, is satisfied that the,—
(a) company has not maintained separate
books of account for the skill development project or has not got such books of
account audited by an accountant in accordance with sub-rule (1);
(b) company has not furnished the
documents referred to in sub-rule (5);
(c) company has ceased to carry
out activities of skill development project;
(d) activities of skill
development project of the company are not genuine; or
(e) activities of the skill
development project of the company are not being carried out in accordance with
the relevant provisions of the Act or the rules or the conditions subject to
which the notification was issued, he shall, after making appropriate
inquiries, furnish a report on the circumstances referred to in clause (a) to
(e) to the C6DT for appropriate action under sub-rule (13) of rule 6AAF.
(7) If the NSDA is not satisfied about
the genuineness of the activities of the notified skill development project,
the NSDA shall send its recommendation to the CBDT for appropriate action under
sub-rule (13) of rule 6AAF.
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