1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.9358 OF 2009 Fie Research Institute ..Petitioner. Vs. Central Board of Direct Taxes and others ..Respondents. .... Mr. S.C. Tiwari with Mr. R. Ashokan and Ms. Meghana Butala for the Petitioner. Mr. Vimal Gupta for the Respondents. .... CORAM : DR. D.Y.CHANDRACHUD & J.P. DEVADHAR, JJ. 22 April, 2010. P.C.: 1. Rule, returnable forthwith. By consent of the learned counsel and at their request the matter is taken up for hearing and final disposal. 2. The Petitioner applied for approval under the provisions of Section 35(1)((ii) of the Income Tax Act, 1961, claiming to be a scientific research association which has as its object the undertaking of scientific research. The Petitioner has since 17 July 1982 been granted approval by the Government of India in the Ministry of 2 Finance under Section 35(1)(ii). The application in question was for the renewal of the recognition for the period between 1 April 2007 and 31 March 2010. The application has been rejected by a cryptic order dated 12 September 2008 which only records that it has been noticed that no scientific research activity, which is an essential requirement to qualify for approval under Section 35(1)(ii) has been carried out by the Petitioner. 3. During the course of the hearing, counsel appearing on behalf of the Petitioner submitted that by a letter dated 12 October 2008 (Exhibit H), addressed to the Director (ITA-II) to the Government of India in the Ministry of Finance, the Petitioner had adverted to the correspondence addressed by the Petitioner in the course of which the relevant information was placed on the record. The grievance of the Petitioner is that though the Petitioner has carried out extensive scientific research, the details of which are set out in the Petition before the Court and were communicated to the Government of India, the application has been rejected without any 3 cogent basis. 4. Counsel appearing on behalf of the Respondents, on the other hand, adverted to a notice to show cause dated 25/29 August 2008 addressed to the Petitioner by the Government of India in the Ministry of Finance calling upon the Petitioner to show cause as to why the application for renewal should not be rejected. In response to this submission, it has been urged on behalf of the Petitioner that the letter dated 12 October 2008 was addressed subsequent to the aforesaid notice and that in any event, the extensive research which has been carried out by the Petitioner and the details which were placed on the record have not been evaluated. 5. The undisputed position before the Court is that approvals have been granted to the Petitioner since 1982 under Section 35(1) (ii). The impugned order which has been passed on 12 September 2008, contains no evaluation of the material which has been relied upon by the Petitioner, save and except for observing that it was 4 noticed that no scientific research activity was carried on by the Petitioner. In our view, particularly having regard to the fact that the Petitioner has placed material on the record of these proceedings in support of the submission that the factual basis of the impugned order is incorrect, it would be appropriate for this Court to direct the Government of India in the Ministry of Finance to reconsider the application for the renewal of approval under Section 35(1)(ii). In order to facilitate this exercise, the impugned order dated 12 September 2008 is set aside. It would be open to the Petitioner to furnish further information to the Respondents to show that the Petitioner complies with the provisions of Rule 5C and 5D of the Income Tax Rules, 1962. Needless to add we have not expressed any opinion on the merits of the Petition which shall be considered afresh in accordance with law. The Petition is accordingly disposed of in the aforesaid terms. There shall be no order as to costs. (Dr. D.Y.Chandrachud, J.) (J.P. Devadhar, J.)