(a) is registered in India;(2) Every company which is approved under sub-rule (2) of rule 18D shall—
(b) has its main object the scientific and industrial research and development;
(c) has adequate infrastructure such as laboratory facilities, qualified manpower, scale-up facilities and prototype development facilities for undertaking scientific research and development of its own;
(d) has a well formulated research and development programme comprising of time bound research and development projects with proper mechanism for selection and review of the projects or programme;
(e) is engaged exclusively in scientific research and development activities leading to technology development, improvement of technology and transfer of technology developed by themselves;
(f) submits the annual return alongwith statement of accounts and annual report within eight months after the close of each accounting year to the prescribed authority.
(a) sell any prototype or output, if any, from its laboratories or pilot plants with the prior permission of the prescribed authority;(3) If, at any stage, it is found that—
(b) intimate the change, if any, in its memorandum of association and articles of association relating to its main objects and forward the altered copy of its memorandum of association and articles of association to the prescribed authority;
(c) apply for extension of the approval at least three months before expiry of the approval already granted by the prescribed authority;
(d) have a system of monitoring the cost of research and development projects.
(a) the approval granted to the company referred to in sub-rule (2) of rule 18D is to avoid payment of taxes by its group companies or companies related to its directors or majority of its shareholders;(4) Every company referred to in sub-rule (1) shall make an application to the prescribed authority for the purposes of obtaining approval.
(b) any provisions of the Act or the rules have been violated,
the prescribed authority specified may withdraw the approval so granted.
(5) Every application referred to in sub-rule (4) shall be accompanied by—
(a) memorandum of association and articles of association incorporating all amendments duly certified by the company secretary or managing director of the company;(6) The prescribed authority may call for any information or document which may be necessary for consideration of the grant of approval under sub-rule (2) of rule 18D.
(b) annual report of the company for the last three years, if available;
(c) photocopies of the memorandum of understanding relating to all on-going and future sponsored research projects or programmes.
(7) The prescribed authority shall grant approval within four months from the date of receipt of the application :
Provided that where the approval is not granted, the decision of the said authority shall be communicated to the applicant within the said period of four months :
Provided further that no approval shall be refused unless the applicant has been given an opportunity of being heard."
Reference/Source: Check at Income Tax site for latest version of the Rules - link