TMI Blog2019 (7) TMI 1377X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court. As rightly argued by Revenue the real aggrieved parties, which should have felt aggrieved by insertion of subsection (7) in Section 35AC 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. 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. 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 subsection (7) of Section 35AC of the Act during the financial year 2017-2018. Benefit of the deduction available u/s 35AC was duly availed of by all the assessee for two financial years, namely, 2015-2016 and 2016-2017. For third financial year, i.e., 2017-2018 because for this year, the assessees were not allowed to claim deduction of the amount paid by them to the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 and 2016-2017. It is for all these reasons, the matter must rest there. - CIVIL APPEAL No. 5849 OF 2019 (Arising out of S.L.P.(C) No.34287 of 2017) - - - Dated:- 25-7-2019 - ABHAY MANOHAR SAPRE And INDU MALHOTRA, JJ. JUDGMENT Abhay Manohar Sapre, J. 1. Leave granted. 2. This appeal is filed against the final judgment and order dated 14.09.2017 passed by the High Court of Gujarat at Ahmedabad in SCA No.7558 of 2017 whereby the High Court dismissed the petition filed by the appellant herein. 3. A few facts need mention here-in-below for the disposal of this appeal, which involves a short point. 4. The appellant herein is the petitioner and the respondents herein are the respondents in the petition out of which this appeal arises. 5. The appellant is a Charitable Trust registered under the provisions of the Bombay Public Trust Act, 1950. The appellant has set up a Heart Hospital in Ahmadabad. The commencement of the project of the appellant's hospital began in the year 2014 (05.05.2014). 6. On 27.09.2014, the appellant filed an application under Section 35AC of the Income Tax Act, 1961 (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201617 20.55 crores 201718 3.84 crores 9. The benefit of claiming deduction was, however, discontinued from the assessment year 2018-2019 by insertion of subsection( 7) in Section 35AC of the Act by the Finance Act, 2016 with effect from 01.04.2017. 10. It is this insertion of sub-section( 7) in Section 35AC of the Act, which gave rise to filing of the petition by the appellant in the Gujarat High Court. The appellant in the petition questioned the constitutional validity of sub-section( 7) of Section 35AC of the Act inter alia on the ground that once the Committee granted an approval to the appellant's hospital project for a period of three financial years, the same could not be withdrawn qua the appellant on the strength of insertion of subsection (7) in Section 35AC of the Act. In other words, the challenge was on the ground that subsection (7) of Section 35AC is essentially prospective in nature and, therefore, it will have no application to those projects which were approved by the Committee prior to insertion of subsection( 7), i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, and while elaborating contended that the appellant so also the assesses, who made payment to the appellant in the financial year 20172018 should have been allowed to claim deduction during the financial year 2017-2018 (Assessment Year 2018-2019) also notwithstanding insertion of subsection (7) in Section 35AC of the Act with effect from 01.04.2017. 15. In support of his submissions, learned counsel placed reliance on the decisions of this Court in S.L. Srinivasa Jute Twine Mills (P) Ltd. vs. Union of India Anr., (2006) 2 SCC 740, Sangam Spinners vs. Regional Provident Fund Commissioner I, (2008) 1 SCC 391 and Commissioner of Income Tax(Central)I, New Delhi vs. Vatika Township Pvt. Ltd., (2015) 1 SCC 1. 16. In reply, learned counsel for the respondent (Revenue) supported the reasoning and the conclusion arrived at by the High Court and prayed for dismissal of the appeal. Learned counsel placed reliance on the decisions in State of Kerala Anr. vs. Gwalior Rayon Silk Manufacturing (WVG.) Co. Ltd. Etc., (1973) 2 SCC 713, Motilal Padampat Sugar Mills Co. Ltd. vs. State of U.P. Ors., (1979) 2 SCC 409, R.K. Garg vs. Union of India Ors., (1981) 4 SCC 675, K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be denied merely on the ground that subsequent to the payment of such sum by the assessee,- (a) the approval granted to such association or institution has been withdrawn; or (b) the notification notifying the eligible project or scheme carried out by the public sector company or local authority or association or institution has been withdrawn. (3) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in subsection (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year. (4) Where an association or institution is approved by the National Committee under subsection (1), and subsequently- (i) that Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which approval was granted; or (ii) such association or institution, to which approval has been granted, has not furnished to the National Committee, after the end of each financial year, a report in such form and setting fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsection (5), the total amount of the payment received by the public sector company or the local authority or the association or the institution, as the case may be, in respect of which such company or authority or association or institution has furnished a certificate referred to in clause (a) of subsection (2) or the deduction claimed by a company under the proviso to subsection (1) shall be deemed to be the income of such company or authority or association or institution, as the case may be, for the previous year in which such approval or notification is withdrawn and tax shall be charged on such income at the maximum marginal rate in force for that year. (7) No deduction under this section shall be allowed in respect of any assessment year commencing on or after the 1st day of April, 2018. Explanation.-For the purposes of this section,- (a) National Committee means the Committee constituted by the Central Government, from amongst persons of eminence in public life, in accordance with the rules made under this Act; (b) eligible project or scheme means such project or scheme for promoting the social and economic w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome during two financial years, namely, 2015-2016 and 2016-2017. If subsection (7) had been retrospective in its operation then the deduction for 2015-2016 and 2016-2017 too would have been disallowed. Admittedly, such is not the case here. 26. As rightly argued by the learned counsel for the respondent (Revenue), a plea of promissory estoppel is not available to an assessee against the exercise of legislative power and nor any vested right accrues to an assessee in the matter of grant of any tax concession to him. In other words, neither the appellant nor the assessee has any right to set up a plea of promissory estoppel against the exercise of legislative power such as the one exercised while inserting subsection (7) in Section 35AC of the Act (seeM/ s Motilal Padampat Sugar Mills Co. Ltd.(supra) and other cases relied on by the learned counsel for the respondent Revenue). It is more so when we find that this subsection was made applicable uniformly to all alike the appellant prospectively. 27. It is not in dispute that now time to donate the amount to eligible projects for claiming deduction from the total income for the year 2017-2018 has expired. It is now ..... X X X X Extracts X X X X X X X X Extracts X X X X
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