Expenditure on Notified Eligible Projects or Schemes – Sewa-Rural (Society for Education, Welfare and Action-Rural), Bharuch Notification Issued on 14-6-2011

WHEREAS by Notification of the Government of India in the Ministry of Finance (Department of Revenue) Number S.O.228(E), dated the 17th March, 1994, issued under clause ( b ) of the Explanation to section 35AC of the Income-tax Act, 1961 (43 of 1961), the Central Government had notified at serial Number 6, ” Integrated Rural Development through health and medical services for rural poor and tribals, vocational training to tribals and rural poor between age 15 to 35 years for poverty alleviation, income generation activities for development of woman, promotion of gramodyog (cottage industries) for poverty alleviation and help to rural poor for constructing low cost houses” by SEWA-Rural (Society for Education, Welfare and Action-Rural), At & Post Office Jhagadia, District Bharuch-393110, as an eligible project or scheme for a period of three years beginning with assessment year 1994-95, which was extended further vide Notification Number S.O.403(E), dated the 6th June, 1996 for a period of three years beginning with assessment year 1997-98 which was extended further vide Notification Number S.O.748(E), dated the 10th September, 1999 for a period of three years beginning with assessment year 2000-01 which was extended further vide Notification Number S.O.986(E), dated the 10th September, 2002 for a period of three years beginning with assessment year 2003-04 and which was extended further vide Notification Number S.O.508(E), dated 4th April, 2006 for period of three years beginning with financial year 2005-06 and which was extended further vide Notification Number S.O. 1297(E), dated 4th June, 2008 for a period of three years beginning with financial year 2008-09;

AND WHEREAS by Notification Number S.O.986(E), dated the 10th September, 2002 the estimated cost was enhanced from Rs. 418.50 lakh to Rs. 518.50 lakh including a corpus fund of Rs. 100.00 lakh;

AND WHEREAS the said project or scheme is likely to extend beyond eighteen years;

AND, WHEREAS, the National Committee for the Promotion of Social and Economic Welfare, being satisfied that the said project or scheme is being executed properly, made a further recommendation under sub-rule (5) of rule 11M of the Income-tax Rules, 1962 for extending the said project or scheme for a further period of three years and amending the project cost from Rs. 518.50 lakh including a corpus fund of Rs. 100 lakh to Rs. 918.45 lakh including a corpus fund of Rs. 205 lakh.

NOW, THEREFORE, the Central Government, in exercise of the powers conferred by sub- section (1) read with clause ( b ) of the Explanation to section 35AC of the Income-tax Act, 1961(43 of 1961),

 ( a )  hereby notifies the scheme or project “Integrated Rural Development through health and medical services for rural poor and tribals, vocational training to tribals and rural poor between age 15 to 35 years for poverty alleviation, income generation activities for development of woman, promotion of gramodyog (cottage industries) for poverty alleviation and help to rural poor for constructing low cost houses” being carried out by SEWA-Rural (Society for Education, Welfare and Action-Rural), At & Post Office Jhagadia, District Bharuch-393110, for a further period of three years commencing with the financial year 2011-12 i.e. 2011-12, 2012-13 & 2013-14; and

 ( b )  further amends the said Notification Number S.O.228(E), dated the 17th March, 1994, to the following effect, namely:-

In the said Notification, in the Table against serial Number 6, in column (4), relating to maximum cost to be allowed as deduction under section 35AC, for the letters, figures and word “Rs. 518.50 lakh including a corpus fund of Rs. 100 lakh” the letters, figures and word ” Rs. 918.45 lakh including a corpus fund of Rs. 205 lakh” shall be substituted.

 

Reference: Section 35AC of the income Tax Act, 1961

Expenditure on eligible projects or schemes

(1) Where an assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee
for carrying out any eligible project or scheme, the assessee shall, subject to the provisions of this section, be allowed a deduction of the amount of such expenditure incurred during the previous year :

Provided that a company may, for claiming the deduction under this sub-section, incur expenditure either by way of payment of any sum as aforesaid or directly on the eligible project or scheme.

(2) The deduction under sub-section (1) shall not be allowed unless the assessee furnishes along with his return of income a certificate—

(a)  where the payment is to a public sector company or a local authority or an association or institution referred to in sub-section (1), from such public sector company or local authority or, as the case may be, association or institution;

(b)  in any other case, from an accountant, as defined in the Explanation below sub-section (2) of section 288,

in such form, manner and containing such particulars (including particulars relating to the progress in the work relating to the eligible project or scheme during the previous year) as may be prescribed.

Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a public sector company or a local authority or to an association or institution for carrying out the eligible project or scheme referred to in this section applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee,—

(a)  the approval granted to such association or institution has been withdrawn; or

(b)  the notification notifying the eligible project or scheme carried out by the public sector company or local authority or association or institution has been withdrawn.]

(3) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year.

(4) Where an association or institution is approved by the National Committee under sub-section (1), and subsequently—

 (i)  that Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which approval was granted; or

(ii)  such association or institution, to which approval has been granted, has not furnished to the National Committee, after the end of each financial year, a report in such form and setting forth such particulars and within such time as may be prescribed,

the National Committee may, at any time, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, withdraw the approval:

Provided that a copy of the order withdrawing the approval shall be forwarded by the National Committee to the Assessing Officer having jurisdiction over the concerned association or institution.

(5) Where any project or scheme has been notified as an eligible project or scheme under clause (b) of the Explanation, and subsequently—

 (i)  the National Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which such project or scheme was notified; or

(ii)  a report in respect of such eligible project or scheme has not been furnished after the end of each financial year, in such form and setting forth such particulars and within such time as may be prescribed,

such notification may be withdrawn in the same manner in which it was issued:

Provided that a reasonable opportunity of showing cause against the proposed withdrawal shall be given by the National Committee to the concerned association, institution, public sector company or local authority, as the case may be:

Provided further that a copy of the notification by which the notification of the eligible project or scheme is withdrawn shall be forwarded to the Assessing Officer having jurisdiction over the concerned association, institution, public sector company or local authority, as the case may be, carrying on such eligible project or scheme.]

(6) Notwithstanding anything contained in any other provision of this Act, where—

 (i)  the approval of the National Committee, granted to an association or institution, is withdrawn under sub-section (4) or the notification in respect of eligible project or scheme is withdrawn in the case of a public sector company or local authority or an association or institution under sub-section (5); or

(ii)  a company has claimed deduction under the proviso to sub-section (1) in respect of any expenditure incurred directly on the eligible project or scheme and the approval for such project or scheme is withdrawn by the National Committee under sub-section (5),

the total amount of the payment received by the public sector company or the local authority or the association or the institution, as the case may be, in respect of which such company or authority or association or institution has furnished a certificate referred to in clause (a) of sub-section (2) or the deduction claimed by a company under the proviso to sub-section (1) shall be deemed to be the income of such company or authority or association or institution, as the case may be, for the previous year in which such approval or notification is withdrawn and tax shall be charged on such income at the maximum marginal rate in force for that year.]

Explanation.—For the purposes of this section,—

(a)  “National Committee” means the Committee constituted by the Central Government, from amongst persons of eminence in public life, in accordance with the rules made under this Act;

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