PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION versus UNION OF INDIA & ORS.

Citation: [2019] 9 S.C.R. 828 · Decided: 25-07-2019 · Supreme Court of India · Bench: ABHAY MANOHAR SAPRE · Disposal: Dismissed

Cited by 2 judgment(s) · cites 9 · see the full citation network in Lexace

Judgment (excerpt)

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PRASHANTI MEDICAL SERVICES & RESEARCH
FOUNDATION
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 5849 of 2019)
JULY 25, 2019
[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]
Income Tax Act, 1961 – Sub-section 7 of s.35AC – Validity of
– In the year 2014 appellant filed an application u/s. 35AC to the
National Committee for promotion of social and economic welfare
for grant of approval to their hospital project so as to enable any
‘assessee’ to incur expenditure by way of making payment of any
amount to the appellant for construction of their approved hospital
project and accordingly claim appropriate deduction of such
payment from his total income during the previous year –
Government approved 28 Projects ‘eligible projects’ including the
project of appellant u/s. 35AC – Appellant received donations from
several assessees during the years 2015-2016 and 2016-2017 –
Assessees claimed deduction for the said financial years – However,
benefit of deduction was discontinued from the assessment year
2018-2019 by insertion of sub-section 7 of s.35AC –  Appellant
urged that they were not able to receive more amount by way of
donation for their project in the financial year 2017-2018 – Writ
petition by appellant challenging the Constitutional validity of sub-
section 7 of s.35 – High Court repelled the challenge and dismissed
the petition – On appeal, held: The real aggrieved parties, which
should have felt aggrieved by insertion of sub-section (7) in s. 35AC
of the Act, were those assessees i.e. donors who despite paying the
donation to the appellant were not allowed to claim deduction of
the said amount from their total income during the financial year
2017-2018 (Assessment year 2018-2019) – However, none of the
assessees have complained – Further, neither the appellant nor the
assessees has any right to set up a plea of promissory estoppel
against the exercise of legislative power such as the one exercised
while inserting sub-section 7 in section 35AC of the Act – Also, this
sub-section was made applicable uniformly to all alike the appellant
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prospectively – Time to donate the amount to eligible projects for
claiming deduction for the year 2017-2018 has also expired – Thus,
no deduction could be allowed to such assessee for period 2017-
2018 – In a tax matter, neither any equity nor hardship has any role
to play while deciding the rights of a taxpayer qua the Revenue –
Therefore, no interference required with the impugned order of the
High Court.
Dismissing the appeal, the Court
HELD : 1. It is not in dispute that 28 projects were
approved by the Committee by notification dated 07.12.2015 but
none of them (27) has come forward to question the constitutional
validity of sub-section (7) except the appellant herein. In other
words, out of 28 projects  owners whose projects were approved
by the Committee by notification dated 07.12.2015, only the
appellant herein has felt aggrieved and filed the petition in the
High Court. Be that as it may, as rightly argued by the respondent
(Revenue), the real aggrieved parties, which should have felt
aggrieved by insertion of sub-section (7) in Section 35AC of the
Act,  were those  assesses, i.e., Donors who despite paying the
donation to the appellant were  not allowed to claim deduction of
the said amount from their total income during the financial year
2017-2018. In other words, one of the main objects for which
Section 35AC was enacted was to allow the assessees to claim
deduction of the amount paid by them to the appellant for their
project. [Paras 19, 20, 21] [840-B-E]
2. As mentioned above, none of the assessees (Donee),
who claimed to have paid amount to any eligible projects came
forward complaining that despite their donating the amount to
the appellant for their project, they were denied the benefit of
claiming deduction of such amount from their total income by
virtue of sub-section (7)  of Section 35AC of the Act during the
financial year 2017-2018. It is not in dispute that the benefit of
the deduction available under Section 35AC  of the Act was duly
availed of by all the assessees for two financial years, namely,
2015-2016 and 2016-2017. [Paras 22, 23] [840-E-F]
PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION
OF INDIA
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3. The dispute is now confined only to third financial year,
i.e.,  2017-2018 because for this y

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