CBDT relaxes the requirement of e-filing Form 3CF
In 2021, the income-tax portal was completely revamped. Subsequently, many taxpayers were facing challenges / technical glitches in filing forms (including income-tax return forms). Taking cognizance of the issues faced, the Central Board of Direct Taxes (CBDT) had issued a few circulars1 extending the due dates for certain compliances. Recently, the CBDT has issued a circular2 to relax the requirement of electronic filing of Form 3CF for seeking approval under Section 35(1) of the Income-tax Act, 1961 (IT Act). We, at BDO in India, have analysed and summarised the said circular hereunder:
What is Form 3CF?
Section 35 of the IT Act is the enabling provision that allows taxpayers to claim a deduction of expenditure incurred towards research and development. Form 3CF is an application form to be submitted by scientific and industrial research organisations for approval under section 35 of the IT Act. Rule 5C (1A) 3 and Rule 5F(2) (aa)4 of the IT Rules prescribe that Form 3CF required for obtaining approval as per Section 35(1)(ii), Section 35(1) IIA) and Section 35(1)(iii) of the IT Act should be furnished and verified electronically.
What is the relaxation provided?
Due to difficulties faced by the taxpayers on the new income tax portal, the condition for electronic filing of Form 3CF has been relaxed and physical filing of Form 3CF has been permitted from the date of issuance of this circular (i.e., 16 March 2022) till:
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30 September 2022; or
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Date of availability of Form 3CF for e-filing on the income tax portal.
Whichever is earlier.
BDO COMMENTS
This is a welcome step as the eligible taxpayer can now file the Form 3CF in physical mode and thereby not lose out on the genuine claim which was otherwise available. It will help most taxpayers since they had a hard time filling out this form and were at risk of losing the benefit.
1 Circular No.15/2021, dated 3 August 2021
Circular No.16/2021, dated 29 August 2021
2 Circular No. 5/2022, dated 16 March 2022
3 5C(1A) – Form No. 3CF shall be furnished electronically, -
(i) under digital signature, if the return of income is required to be furnished under digital signature;
(ii) through electronic verification code in a case not covered under clause (i).
4 5F(2)(aa) – Form No. 3CF shall be furnished electronically, -
(i) under digital signature, if the return of income is required to be furnished under digital signature;
(ii) through electronic verification code in a case not covered under clause (i).
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