Case Law Details
Prashanti Medical Services & Research Foundation Vs UOI (Supreme Court of India)
Conclusion:
Assessee’s contention that assessee-charitable trust were not able to receive more amount by way of donation for their project in the third financial year 2017-2018 due to insertion of sub-section (7) of Section 35AC and therefore, Court may consider appropriate to invoke powers under Article 142 of the Constitution and allow assessee to receive donation even for the third financial year from their donors was not sustainable as neither any equity nor hardship has any role to play while deciding the rights of any taxpayer. 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.
Held:
Assessee-charitable trust had set up a Heart Hospital in Ahmadabad which had commenced in the year 2014 (05.05.2014). Assessee filed an application under Section 35AC to the National Committee for Promotion of Social and Economic Welfare for grant of approval to their hospital project as specified in Section 35AC so as to enable any “assessee” to incur expenditure by way of making payment of any amount to assessee for construction of their approved hospital project and accordingly claim appropriate deduction of such payment from his total income during the previous year. A notification was issued by the Government of India on 07.12.2015 in which assessee was eligible for the same. The issue arose for consideration was that sub-section (7) of Section 35AC was essentially prospective in nature and, therefore, it would have no application to those projects which were approved by the Committee prior to insertion of subsection(7), i.e., 01.04.2017. Thus, Revenue could not apply sub-section (7) retrospectively and withdraw the benefits, whether fully or partially, which were approved to assessee. Assessee also contended that if sub section(7) had been held not applicable to the assessee’s project then assessee would have received much more amount than Rs.3.84 crores during the financial year 2017-2018, which was clear from the amount received by assessee in earlier two years prior to insertion of sub-section(7). It was held 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 sub-section (7) in Section 35AC in tax matter, neither any equity nor hardship has any role to play while deciding the rights of any taxpayer qua the Revenue; Second, once the action is held in accordance with law and especially in tax matters, the question of invoking powers under Article 142 of the Constitution does not arise; and third, the appellant’s Donors were admittedly allowed to claim deduction of the amount paid by them to the appellant under Section 35AC during the two financial years 2015-2016 and 2016-2017. It is for all these reasons, the matter must rest there. Thus, deduction was not allowable as in a taxing statute, a plea based on equity or/and hardship was not legally sustainable.
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