Aravind Kumar, J.

1. Petitioner is seeking for quashing of the assessment order passed by first respondent under 143(3) r/w. Section 144C(13) of the Income-tax Act, 1961 (for short 'Act') dated 31.01.2013 - Annexure-R and consequential demand notice dated 31.01.2014 at Annexure-R 1 issued by first respondent. By consent of learned Advocates appearing for parties matter is taken up for final hearing.

Factual Matrix:

Petitioner is an assessee under the Act and is engaged in the business of software development, manufacturing and trading of networking equipments. Return of income for the assessment year 2009-10 came to be filed on 29.09.2009 declaring nil income and claiming loss of Rs. 7,75,95,922/- On said return being selected for scrutiny, notice came to be issued and draft assessment order came to be framed on 27.03.2013 under Section 144C(1) of the Act whereunder income of petitioner was revised after making certain adjustments. On receipt of the draft assessment order, assessee filed its objection before the Dispute Resolution Panel ('DRP' for short) and after affording opportunity of hearing to the assessee, DRP issued a direction to the jurisdictional Assessing Officer on 30.12.2013. The DRP held that where the express provisions of the Act excludes certain expenditure from the purview of Section 35 of the Act, such expenditure cannot be allowed and as such, the report of the prescribed authority cannot be considered as far as such excluded expenditure is concerned. It was also held by DRP that certificate issued by the prescribed authority cannot over rule the express provision of the Act and accordingly directions came to be issued to Assessing Officer after considering the directions issued by the DRP, framed assessment order on 31.01.2013 - Annexure-R framed assessment order whereunder as against the deduction claimed by the assessee under Section 35(2AB) in respect of Research and Development expenditure in a sum of Rs. 89,35,48,193/-, a sum of Rs. 48,41,82,071/- was disallowed and same came to be added to the income of assessee-company. Further, a sum of Rs. 2,63,68,301/- claimed by the assessee as 100% deduction under Section 35(1)(i) also came to be disallowed. Said order of assessment dated 31.01.2013 is impugned in the present writ petition.

2. I have heard the arguments of Sriyuths N. Venkataraman, learned Senior counsel appearing on behalf of Sri K.R. Vasudevan, for petitioner, Sri K.V. Aravind, learned Senior panel counsel appearing for respondents.

Contentions on Behalf of assessee:

3. It is the contention of Sri Venkataraman, learned Sr. counsel appearing on behalf of petitioner that order of first respondent is arbitrary, without application of mind and it is without jurisdiction and has been passed without following due process of law. He would elaborate his submission by contending there are no foundational facts on the basis of which the first respondent could have ignored the certificate issued by the prescribed authority - Department of Scientific and Industrial Research (for short 'DSIR') which is the prescribed authority under Rule 6(1) of the Income-tax Rules, 1961 empowered to issue certificate to the assessee who claims allowance of expenditure under Section 35(2AB) or 35(1)(i) of the Act. It is contended that petitioner is engaged in developing and selling optical network products to its worldwide customers and as such carry out product development activities in developing optical transmission telecommunication equipment which is a continuous process and as such, petitioner is entitled to claim deduction of sum equal to two times of the expenditure incurred on 'scientific research' as permitted under Section 35(2AB) of the Act. It is contended that petitioner accordingly has obtained approval in form No. 3CL after audit came to be conducted by DSIR and a report has been submitted by the said prescribed authority by its report dated 10.04.2013 duly communicated to the Director General of Income