(3)Approval to a company under clause (iia) of sub-section (1) of section 35 shall be subject to the following conditions, namely :-(a)The sum paid to the company shall be used for scientific research;(b)The applicant company shall carry on scientific research through its own employees using its own assets;(c)A company approved under clause (iia) of sub-section (1) of section 35 shall maintain separate books of account in respect of the sums received by it for scientific research, reflect therein the amount used for carrying on research, get such books of account audited by an accountant, and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139.Explanation. - For the purpose of this clause "accountant" shall have the same meaning as assigned to it in Explanation to sub-section (2) of section 288 of the Act;(d)The company shall maintain a separate statement of donations received and the amount used for research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to in sub-rule (3).(e)Subsequent to approval, the company shall, every year, by the due date of furnishing the return of income under sub-section (1) of section 139, furnish a statement to the Commissioner of Income-tax containing the following information, namely :-(i)a detailed note on the research work undertaken by it during the previous year;(ii)a summary of research articles published in national or international journals during the year;(iii)any patents or other similar rights applied for or registered during the year;(iv)programme of research projects to be undertaken during the forthcoming year and the financial allocation for such subjects.(f)If the Commissioner of Income-tax is satisfied that the company,-(i)is not maintaining separate books of account for research activities, or(ii)has failed to furnish its audit report, or(iii)has not furnished its statement of the sums received and the sums used for research, or a statement referred to in sub-clause (e), or(iv)has ceased to carry on its research activities, or its activities are not genuine, or(v)is not fulfilling the conditions subject to which approval was granted to it,he may after making appropriate enquiries, furnish a report on the circumstances referred to in sub-clauses (i) to (v) to the jurisdictional Chief Commissioner of Income-tax within six months from the date of furnishing the return of income under sub-section (1) of section 139.
