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2017 (9) TMI 1237 - HC - Income TaxExpenditure on eligible projects or schemes - withdrawal of the deduction u/s 35AC - principle of promissory estoppel - Vires of sub-section (7) of Section 35AC as introduced by the Finance Act 2016 with effect from 01.04.2017 challenged - Held that:- Section 35AC recognizes the deduction in case of expenditure by an assessee by way of payment to the approved institutions carrying out eligible project or the scheme or payment made directly on such eligible project or scheme. As per Explanation clause (b), eligible project or scheme would be a project or scheme for promoting the social and economic welfare or the uplift of public as the Central Government may notify. The deduction was therefore not confined to the healthcare service which the petitioner is dispensing and would cover range of projects and schemes for promoting social and economic welfare or the uplift of the public as may be notified. In plain terms, sub-section (7) of section 35AC provided for a terminal point for granting such benefit. After 01.04.2017 the legislature desired to withdraw such deduction. Any expenditure after such date would no longer be an eligible deduction. The provision applies prospectively. The Union legislature was competent to introduce such amendment. We do not find merits in the petition.
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