Section 39 — Procedure for approval of skill development projects under section 47(1)(b)

(1) A skill development project (herein referred as the project) shall be considered for notification, if it is undertaken by an eligible company and theproject is undertaken in a separate facility in a training institute.
(2) Before undertaking any project, the eligible company shall make an application in Form No. 22 to the National Council for Vocational Education andTraining (herein referred to as "National Council") for notification of such project under section 47(1)(b).
(3) A copy of the application shall also be sent to the Commissioner of Income-tax having jurisdiction over the applicant, along with an acknowledgementreceipt as evidence of furnishing of application to the National Council.
(4) The application shall be accompanied by—
(a) a letter of concurrence from the training institute in which the project is to be undertaken;
(b) a detailed note on the skill development project to be undertaken by the eligible company; and
(c) details of the expenditure expected to be incurred on the project and expected date of completion of the project.
(5) If any defect is noticed in the application referred to in sub-rule (2), or if any relevant document is not attached thereto, the National Council shall, beforethe expiry of one month from the end of the month in which the application is received in its office, intimate the defect to the applicant for its rectification.
(6) The applicant shall remove the defect within a period of one month from the end of the month in which the intimation letter for removal of the deficiencyis served.
(7) Where the applicant fails to remove the deficiency within the period mentioned in sub-rule (6), the National Council shall send its recommendation fortreating the application as invalid to the Board.
(8) On receipt of the recommendation of the National Council under sub-rule (7), the Board, if satisfied, may pass an order treating the application as invalid.
(9) If the application is complete in all respects,—
(i) the National Council may make such inquiry or call for such documents from the eligible company or the training institute as it may considernecessary for satisfying itself regarding the genuineness of the current and proposed activity of the applicant relating to skill development; and(ii) send its recommendation to the Board for grant of approval or rejection of the application before the expiry of two months from the end of the monthin which the application, complete in all respects, was received in its office.(10) The Commissioner of Income-tax having jurisdiction over the applicant shall send his recommendation to the National Council for grant of approval orrejection of the application, after considering the compliance of the applicant with the various provisions of the Act before the expiry of one month from theend of the month in which the copy of the application was received in his office.
(11) If the National Council recommends the grant of approval under sub-rule (9), the Board shall within two months from the end of the quarter in which itreceives the report from the National Council, issue a notification in Form No. 23 under section 47(1)(b), specifying the project, subject to conditionsmentioned in rule 40 or such other conditions, as it may deem fit, to be effective for such period not exceeding three tax years.
(12) If the National Council recommends the rejection of the application under sub-rule (9), the Board shall pass an order rejecting the application.
(13) If the Board is satisfied with the activities of the project during the period of notification, it may notify the said project for a further period in consultationwith the National Council.
(14) If the Board is satisfied that––
(a) the eligible company or the training institute has ceased its activities, or that its activities are not genuine; or
(b) that its activities are not being carried out in accordance with––(i) all or any of the relevant provisions of the Act or this rule or rule 40; or(ii) the conditions subject to which the notification was issued,it may pass an order for revocation of the notification issued under sub-rule (11) or sub-rule (13) after providing a reasonable opportunity of being heard.
(15) A copy of notification, approval, rejection, or cancellation shall be communicated to:—
(a) the applicant;
(b) the National Council;
(c) the training institute; and
(d) the Commissioner of Income-tax having jurisdiction over the applicant.