828 SUPREME COURT[2019]REPORTS9 S.C.R. 828 [2019] 9 S.C.R. A PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION OF INDIA & ORS. B (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 C 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 D 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 E

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 F 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 G 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 H 828 PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 829 OF INDIA

prospectively – Time to donate the amount to eligible projects for A 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 B 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 C 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 D(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 E 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 F 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 Gthe 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] H 830 SUPREME COURT REPORTS [2019] 9 S.C.R. A 3. The dispute is now confined only to 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 appellant on account of insertion of sub-section(7) in Section 35AC of the Act with effect from 01.04.2017. [Para 24] [840-G-H] B

4. As rightly argued by 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 C 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 (M/s Motilal Padampat Sugar Mills Co. Ltd. and other cases relied on by the counsel for the respondent-Revenue). It is more so when this Court finds that this sub-section was made applicable uniformly D to all alike the appellant prospectively. [Para 26] [841-C-D] 5. 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 no longer available due to efflux of time. In this view of the matter, even if the appellant E received any amount from any assessee for their project, no deduction could be allowed to such assessee either for the period 2017-2018 or for any subsequent period. [Para 27] [841-E]

6. It was, however, stated by the appellant that they have received 3.84 crores during the year 2017-2018 from various F assessees. It was also stated that if sub-section(7) had been held not applicable to the appellant’s project then the appellant would have received much more amount than Rs.3.84 crores during the financial year 2017-2018, which is clear from the amount received by the appellant in earlier two years prior to insertion of sub-section(7), i.e., Rs. 10.97 crores during the financial year G 2015-2016 and Rs. 20.55 crores during the financial year 2016-2017. There is no merit in this submission. In a taxing statute, a plea based on equity or/and hardship is not legally sustainable. The constitutional validity of any provision and especially taxing provision cannot be struck down on such reasoning. H [Paras 28, 29] [841-F-H; 842-A] PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 831 OF INDIA 7. The appellant urged that this Court may consider A appropriate to invoke powers under Article 142 of the Constitution and allow the appellant to receive donation even for the third financial year in terms of the notification dated 07.12.2015 from their donors. This submission cannot be accepted for more than one reason. First, in tax matter, neither any equity nor B

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 C 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. [Paras 30, 31] [842-B-D] S.L. Srinivasa Jute Twine Mills (P) Ltd. v. Union of India & Anr., (2006) 2 SCC 740 : [2006] 2 SCR 235 ; D Sangam Spinners v. Regional Provident Fund Commissioner I, (2008) 1 SCC 391 : [ 2007] 12 SCR 883 ; Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Pvt. Ltd. (2015) 1 SCC 1 : [2014] 12 SCR 1037 ; State of Kerala & Anr. v. E Gwalior Rayon Silk Manufacturing (WVG.) Co. Ltd. Etc., (1973) 2 SCC 713 : [ 1974] 1 SCR 671 ; Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. & Ors., (1979) 2 SCC 409 : [1979] 2 SCR 641 ; R.K. Garg v. Union of India & Ors., (1981) 4 SCC 675 : [1982] 1 SCR 947 ; Kasinka Trading & Anr. v. Union of India & F Anr., (1995) 1 SCC 274 : [ 1994] 4 Suppl. SCR 448 ; Bannari Amman Sugars Ltd. v. Commercial Tax Officer & Ors., (2005) 1 SCC 625 : [2004] 6 Suppl. SCR 264 ; Shree Sidhbali Steels Ltd. & Ors. v. State of U.P.

& Ors., (2011) 3 SCC 193 : [2011] 3 SCR 134 ; Bajaj G Hindustan Ltd. v. Sir Shadi Lal Enterprises Ltd. & Anr., (2011) 1 SCC 640 : [2010] 15 SCR 156 ; Kothari Industrial Corporation Ltd. v. Tamil Nadu Electricity Board & Anr., (2016) 4 SCC 134 : [2016] 1 SCR 564 – referred to. H 832 SUPREME COURT REPORTS [2019] 9 S.C.R. A Case Law Reference [2006] 2 SCR 235 referred to Para 15 [2007] 12 SCR 883 referred to Para 15 [2014] 12 SCR 1037 referred to Para 15 B [1974] 1 SCR 671 referred to Para 16 [1979] 2 SCR 641 referred to Para 16 [1982] 1 SCR 947 referred to Para 16 [1994] 4 Suppl. SCR 448 referred to Para 16 C [2004] 6 Suppl. SCR 264 referred to Para 16 [2011] 3 SCR 134 referred to Para 16 [2010] 15 SCR 156 referred to Para 16 [2016] 1 SCR 564 referred to Para 16 D CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5849 of 2019. From the Judgment and Order dated 14.09.2017 of the High Court of Gujarat at Ahmedabad in SCA No. 7558 of 2017. E Arvind Datar, Sr. Adv., Mahesh Agarwal, Rishi Agrawala, Ms. Devika Mohan, Nishant Rao, E. C. Agrawala, Advs. for the Appellant. K. Radhakrishnan, Sr. Adv., Ms. Meenakshi Grover, Parthiv Goswami (For Mrs. Anil Katiyar), Advs. for the Respondents. F The Judgment of the Court was delivered by 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 G the appellant herein. 3. A few facts need mention hereinbelow for the disposal of this appeal, which involves a short point. 4. The appellant herein is the petitioner and the respondents herein H are the respondents in the petition out of which this appeal arises. PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 833 OF INDIA [ABHAY MANOHAR SAPRE, J.] 5. The appellant is a Charitable Trust registered under the A 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 (hereinafter referred to as “the Act) B to the National Committee for Promotion of Social and Economic Welfare, Department of Revenue, North Block, New Delhi (hereinafter referred to as “the Committee”) for grant of approval to their hospital project as specified in Section 35AC of the Act so as to enable any “assessee” to incur expenditure by way of making payment of any amount Cto 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. Like the appellant, several persons, as specified in Section 35AC of the Act, also made applications to the Committee for grant of approval to their hospital projects. D 7. A notification was issued by the Government of India on 07.12.2015 mentioning therein that the Committee has approved 28 projects as “eligible projects” under Section 35AC of the Act. The name of the appellant appears at serial No. 10 in the notification dated 07.12.2015. It reads as under: S.No. Name of the Project or Maximum E Institution scheme and amount of estimated cost to be cost thereof allowed as deduction under Section 35AC and period of approval 10. Prashanti Prashanti The F Medical Medical Committee Research Services & recommended Foundation, Reasearch approval for Sri Satya Sai Foundation, the project at Heart Ahmedabad the estimated

Hospital, RS.250.00 cost of Kashindra Crore Rs.250.00 Village, crore for G Ahmedabad- three financial Dholka years Road(Gujarat) commencing with financial year, 2015- 16,i.e., 2015- 16, 2016-17 and 2017-18 H 834 SUPREME COURT REPORTS [2019] 9 S.C.R. A 8. According to the appellant, they received amount by way of donation from several assesses during the years 2015-2016 and 2016-2017. These assesses then claimed deduction of the amount, which they had donated to the appellant for their hospital project, from their total income. As per the appellant, they received donations in three financial years from several assesses for their hospital project as detailed B below: Financial Rs. year 2015-16 10.97 crores 2016-17 20.55 crores 2017-18 3.84 crores C 9. The benefit of claiming deduction was, however, discontinued from the assessment year 2018-2019 by insertion of sub-section(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 D 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 E be withdrawn qua the appellant on the strength of insertion of sub-section (7) in Section 35AC of the Act. In other words, the challenge was on the ground that sub-section (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 sub-section(7), i.e., 01.04.2017. The challenge was also on the ground F that the Revenue cannot apply sub-section (7) retrospectively and withdraw the benefits, whether fully or partially, which were approved to the appellant. It was, therefore, contended that the appellant and the assessees should be held entitled to avail of the full benefit for the three financial years in terms of the notification dated 07.12.2015. G 11. The respondent (Revenue) supported insertion of sub-section

(7) in Section 35AC and inter alia contended that, firstly, insertion of sub-section (7) is prospective in nature; secondly, it operates qua every person alike the appellant irrespective of the approval granted by the Committee; Thirdly, sub-section (7), in clear terms, provides H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 835 OF INDIA [ABHAY MANOHAR SAPRE, J.] discontinuance of deduction only from the assessment year 2018-2019 A onwards; Fourthly, this intention of the legislature is clear from the perusal of the budget speech of the Minister of Finance, notes on clauses and memorandum explaining the amended provisions in the Finance Bill, 2016; Fifthly, the appellant not being an assessee under Section 35AC of the Act has no locus to raise the issue in question and nor they are, in any B way, affected due to insertion of sub-section (7); Sixthly, the appellant neither has any vested right in such matters nor has any right to set up a plea of promissory estoppel against the exercise of any legislative power such as the one exercised by the Parliament while inserting sub-section(7); and lastly, the appellant has already received substantial donations from several assessees for their hospital project during the two financial years C (2015-2016 and 2016-2017) and, therefore, there is neither any hardship nor any prejudice caused to the appellant due to insertion of sub-section (7) in Section 35AC of the Act.

12. The High Court, in the impugned order, repelled the challenge and while upholding the pleas raised by the respondent(Revenue) dismissed D the appellant’s petition, which has given rise to filing of this appeal by the appellant after obtaining special leave from this Court. 13. Heard Mr. Arvind Datar, learned senior counsel for the appellant and Mr. K. Radhakrishnan, learned senior counsel for the respondents. E 14. Mr. Arvind Datar, learned senior counsel appearing for the appellant reiterated the aforementioned submissions, which were urged in High Court, and while elaborating contended that the appellant so also the assesses, who made payment to the appellant in the financial year 2017-2018 should have been allowed to claim deduction during the F financial year 2017-2018 (Assessment Year 2018-2019) also notwithstanding insertion of sub-section (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) G 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. H 836 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 B SCC 409, R.K. Garg vs. Union of India & Ors., (1981) 4 SCC 675, Kasinka Trading & Anr. vs. Union of India & Anr., (1995) 1 SCC 274, Bannari Amman Sugars Ltd. vs. Commercial Tax Officer & Ors., (2005) 1 SCC 625, Shree Sidhbali Steels Ltd. & Ors. vs. State of U.P. & Ors., (2011) 3 SCC 193, Bajaj Hindustan Ltd. vs. Sir C Shadi Lal Enterprises Ltd. & Anr., (2011) 1 SCC 640 and Kothari Industrial Corporation Ltd. vs. Tamil Nadu Electricity Board & Anr., (2016) 4 SCC 134. 17. Having heard the learned counsel for the parties and on perusal of the record of the case, we are not inclined to interfere with the D impugned order of the High Court. 18. Section 35AC was inserted in the Act with effect from 01.04.1992 whereas sub-section (7), which is subject matter of this appeal, was inserted in Section 35AC with effect from 01.04.2017, which reads as under:

E “35AC. (1) Where an assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme, the assessee shall, subject to the provisions of this section, be allowed a deduction of the F amount of such expenditure incurred during the previous year : Provided that a company may, for claiming the deduction under this sub-section, incur expenditure either by way of payment of any sum as aforesaid or directly on the eligible G project or scheme. (2) The deduction under sub-section (1) shall not be allowed unless the assessee furnishes along with his return of income a certificate— H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 837 OF INDIA [ABHAY MANOHAR SAPRE, J.] (a) where the payment is to a public sector company or a A local authority or an association or institution referred to in sub-section (1), from such public sector company or local authority or, as the case may be, association or institution; (b) in any other case, from an accountant, as defined in the Explanation below sub-section (2) of section 288, in B such form, manner and containing such particulars (including particulars relating to the progress in the work relating to the eligible project or scheme during the previous year) as may be prescribed.

Explanation.—The deduction, to which the assessee is C entitled in respect of any sum paid to a public sector company or a local authority or to an association or institution for carrying out the eligible project or scheme referred to in this section applies, shall not be denied merely on the ground that subsequent to the payment of such sum D 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 E 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 sub-section (1), deduction shall not be allowed in respect of such expenditure under any F 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 sub-section (1), and subsequently— G (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 H 838 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (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 forth such particulars and within such time as may be prescribed, B the National Committee may, at any time, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, withdraw the approval: Provided that a copy of the order withdrawing the C approval shall be forwarded by the National Committee to the Assessing Officer having jurisdiction over the concerned association or institution. (5) Where any project or scheme has been notified as an eligible project or scheme under clause (b) of the Explanation, and subsequently— D (i) the National 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 such project or scheme was notified; or E (ii) a report in respect of such eligible project or scheme has not been furnished after the end of each financial year, in such form and setting forth such particulars and within such time as may be prescribed, such notification may be withdrawn in the same manner in F which it was issued:

Provided that a reasonable opportunity of showing cause against the proposed withdrawal shall be given by the National Committee to the concerned association, institution, public sector company or local authority, as the G case may be: Provided further that a copy of the notification by which the notification of the eligible project or scheme is withdrawn shall be forwarded to the Assessing Officer having jurisdiction over the concerned association, institution, H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 839 OF INDIA [ABHAY MANOHAR SAPRE, J.] public sector company or local authority, as the case may A be, carrying on such eligible project or scheme. (6) Notwithstanding anything contained in any other provision of this Act, where— (i) the approval of the National Committee, granted to an B association or institution, is withdrawn under sub-section (4) or the notification in respect of eligible project or scheme is withdrawn in the case of a public sector company or local authority or an association or institution under sub-section (5); or C (ii) a company has claimed deduction under the proviso to sub-section (1) in respect of any expenditure incurred directly on the eligible project or scheme and the approval for such project or scheme is withdrawn by the National Committee under sub-section (5),

the total amount of the payment received by the public D 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 sub-section (2) or the deduction claimed by a company under the proviso E to sub-section (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. F (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 G constituted by the Central Government, from amongst persons of eminence in public life, in accordance with the rules made under this Act; H 840 SUPREME COURT REPORTS [2019] 9 S.C.R. A (b) “eligible project or scheme” means such project or scheme for promoting the social and economic welfare of, or the uplift of, the public as the Central Government may, by notification in the Official Gazette, specify in this behalf on the recommendations of the National Committee.”

B 19. 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 C petition in the High Court. 20. Be that as it may, as rightly argued by the learned counsel for 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 D the appellant were not allowed to claim deduction of the said amount from their total income during the financial year 2017-2018. 21. 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. E 22. 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 F 35AC of the Act during the financial year 2017-2018.

23. 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. 24. The dispute is now confined only to third financial year, i.e., G 2017-2018 because for this year, the assessees were not allowed to claim deduction of the amount paid by them to the appellant on account of insertion of sub-section(7) in Section 35AC of the Act with effect from 01.04.2017. H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 841 OF INDIA [ABHAY MANOHAR SAPRE, J.] 25. We are of the view that sub-section (7) is prospective in its A operation and, therefore, all the assessees were rightly allowed to claim deduction of the amount paid by them to eligible projects from their total income during two financial years, namely, 2015-2016 and 2016-2017. If sub-section (7) had been retrospective in its operation then the deduction for 2015-2016 and 2016-2017 too would have been disallowed. B 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 Cother 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 of the Act (see-M/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 sub-section was made D 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 no longer available due to efflux of time. In this view of the matter, even if the appellant received any E amount from any assessee for their project, no deduction could be allowed to such assessee either for the period 2017-2018 or for any subsequent period.

28. It was, however, stated by the learned counsel for the appellant that the appellant has received 3.84 crores during the year 2017-2018 F from various assessees. It was also stated that if sub-section(7) had been held not applicable to the appellant’s project then the appellant would have received much more amount than Rs.3.84 crores during the financial year 2017-2018, which is clear from the amount received by the appellant in earlier two years prior to insertion of sub-section(7), i.e., GRs. 10.97 crores during the financial year 2015-2016 and Rs. 20.55 crores during the financial year 2016-2017. 29. We find no merit in this submission. In a taxing statute, a plea based on equity or/and hardship is not legally sustainable. The constitutional H 842 SUPREME COURT REPORTS [2019] 9 S.C.R. A validity of any provision and especially taxing provision cannot be struck down on such reasoning. 30. Learned counsel for the appellant then urged that having regard to the fact that the appellant has set up a charitable hospital and that they were not able to receive more amount by way of donation for their B project in the third financial year 2017-2018, this Court may consider appropriate to invoke powers under Article 142 of the Constitution and allow the appellant to receive donation even for the third financial year in terms of the notification dated 07.12.2015 from their donors.

31. We are afraid, we cannot accept this submission for more C than one reason. First, as held above, 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 D 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. 32. Learned counsel for the appellant placed reliance on the decision of S.L. Srinivasa Jute Twine Mills (P) Ltd. (supra), Sangam E Spinners (supra) and CIT vs. Vatika Township Pvt. Ltd., (supra). In our view, in the light of the foregoing discussion and the findings recorded, the arguments based on the principle laid down in these decisions cannot be accepted. We, therefore, need not deal with this issue any more. F 33. In view of the foregoing discussion, we find no merit in the appeal. It is accordingly dismissed. Ankit Gyan Appeal dismissed. G H

828 SUPREME COURT[2019]REPORTS9 S.C.R. 828 [2019] 9 S.C.R. A PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION OF INDIA & ORS. B (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 C 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 D 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 E

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 F 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 G 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 H 828 PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 829 OF INDIA

prospectively – Time to donate the amount to eligible projects for A 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 B 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 C 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 D(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 E 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 F 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 Gthe 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] H 830 SUPREME COURT REPORTS [2019] 9 S.C.R. A 3. The dispute is now confined only to 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 appellant on account of insertion of sub-section(7) in Section 35AC of the Act with effect from 01.04.2017. [Para 24] [840-G-H] B

4. As rightly argued by 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 C 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 (M/s Motilal Padampat Sugar Mills Co. Ltd. and other cases relied on by the counsel for the respondent-Revenue). It is more so when this Court finds that this sub-section was made applicable uniformly D to all alike the appellant prospectively. [Para 26] [841-C-D] 5. 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 no longer available due to efflux of time. In this view of the matter, even if the appellant E received any amount from any assessee for their project, no deduction could be allowed to such assessee either for the period 2017-2018 or for any subsequent period. [Para 27] [841-E]

6. It was, however, stated by the appellant that they have received 3.84 crores during the year 2017-2018 from various F assessees. It was also stated that if sub-section(7) had been held not applicable to the appellant’s project then the appellant would have received much more amount than Rs.3.84 crores during the financial year 2017-2018, which is clear from the amount received by the appellant in earlier two years prior to insertion of sub-section(7), i.e., Rs. 10.97 crores during the financial year G 2015-2016 and Rs. 20.55 crores during the financial year 2016-2017. There is no merit in this submission. In a taxing statute, a plea based on equity or/and hardship is not legally sustainable. The constitutional validity of any provision and especially taxing provision cannot be struck down on such reasoning. H [Paras 28, 29] [841-F-H; 842-A] PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 831 OF INDIA 7. The appellant urged that this Court may consider A appropriate to invoke powers under Article 142 of the Constitution and allow the appellant to receive donation even for the third financial year in terms of the notification dated 07.12.2015 from their donors. This submission cannot be accepted for more than one reason. First, in tax matter, neither any equity nor B

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 C 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. [Paras 30, 31] [842-B-D] S.L. Srinivasa Jute Twine Mills (P) Ltd. v. Union of India & Anr., (2006) 2 SCC 740 : [2006] 2 SCR 235 ; D Sangam Spinners v. Regional Provident Fund Commissioner I, (2008) 1 SCC 391 : [ 2007] 12 SCR 883 ; Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Pvt. Ltd. (2015) 1 SCC 1 : [2014] 12 SCR 1037 ; State of Kerala & Anr. v. E Gwalior Rayon Silk Manufacturing (WVG.) Co. Ltd. Etc., (1973) 2 SCC 713 : [ 1974] 1 SCR 671 ; Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. & Ors., (1979) 2 SCC 409 : [1979] 2 SCR 641 ; R.K. Garg v. Union of India & Ors., (1981) 4 SCC 675 : [1982] 1 SCR 947 ; Kasinka Trading & Anr. v. Union of India & F Anr., (1995) 1 SCC 274 : [ 1994] 4 Suppl. SCR 448 ; Bannari Amman Sugars Ltd. v. Commercial Tax Officer & Ors., (2005) 1 SCC 625 : [2004] 6 Suppl. SCR 264 ; Shree Sidhbali Steels Ltd. & Ors. v. State of U.P.

& Ors., (2011) 3 SCC 193 : [2011] 3 SCR 134 ; Bajaj G Hindustan Ltd. v. Sir Shadi Lal Enterprises Ltd. & Anr., (2011) 1 SCC 640 : [2010] 15 SCR 156 ; Kothari Industrial Corporation Ltd. v. Tamil Nadu Electricity Board & Anr., (2016) 4 SCC 134 : [2016] 1 SCR 564 – referred to. H 832 SUPREME COURT REPORTS [2019] 9 S.C.R. A Case Law Reference [2006] 2 SCR 235 referred to Para 15 [2007] 12 SCR 883 referred to Para 15 [2014] 12 SCR 1037 referred to Para 15 B [1974] 1 SCR 671 referred to Para 16 [1979] 2 SCR 641 referred to Para 16 [1982] 1 SCR 947 referred to Para 16 [1994] 4 Suppl. SCR 448 referred to Para 16 C [2004] 6 Suppl. SCR 264 referred to Para 16 [2011] 3 SCR 134 referred to Para 16 [2010] 15 SCR 156 referred to Para 16 [2016] 1 SCR 564 referred to Para 16 D CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5849 of 2019. From the Judgment and Order dated 14.09.2017 of the High Court of Gujarat at Ahmedabad in SCA No. 7558 of 2017. E Arvind Datar, Sr. Adv., Mahesh Agarwal, Rishi Agrawala, Ms. Devika Mohan, Nishant Rao, E. C. Agrawala, Advs. for the Appellant. K. Radhakrishnan, Sr. Adv., Ms. Meenakshi Grover, Parthiv Goswami (For Mrs. Anil Katiyar), Advs. for the Respondents. F The Judgment of the Court was delivered by 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 G the appellant herein. 3. A few facts need mention hereinbelow for the disposal of this appeal, which involves a short point. 4. The appellant herein is the petitioner and the respondents herein H are the respondents in the petition out of which this appeal arises. PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 833 OF INDIA [ABHAY MANOHAR SAPRE, J.] 5. The appellant is a Charitable Trust registered under the A 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 (hereinafter referred to as “the Act) B to the National Committee for Promotion of Social and Economic Welfare, Department of Revenue, North Block, New Delhi (hereinafter referred to as “the Committee”) for grant of approval to their hospital project as specified in Section 35AC of the Act so as to enable any “assessee” to incur expenditure by way of making payment of any amount Cto 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. Like the appellant, several persons, as specified in Section 35AC of the Act, also made applications to the Committee for grant of approval to their hospital projects. D 7. A notification was issued by the Government of India on 07.12.2015 mentioning therein that the Committee has approved 28 projects as “eligible projects” under Section 35AC of the Act. The name of the appellant appears at serial No. 10 in the notification dated 07.12.2015. It reads as under: S.No. Name of the Project or Maximum E Institution scheme and amount of estimated cost to be cost thereof allowed as deduction under Section 35AC and period of approval 10. Prashanti Prashanti The F Medical Medical Committee Research Services & recommended Foundation, Reasearch approval for Sri Satya Sai Foundation, the project at Heart Ahmedabad the estimated

Hospital, RS.250.00 cost of Kashindra Crore Rs.250.00 Village, crore for G Ahmedabad- three financial Dholka years Road(Gujarat) commencing with financial year, 2015- 16,i.e., 2015- 16, 2016-17 and 2017-18 H 834 SUPREME COURT REPORTS [2019] 9 S.C.R. A 8. According to the appellant, they received amount by way of donation from several assesses during the years 2015-2016 and 2016-2017. These assesses then claimed deduction of the amount, which they had donated to the appellant for their hospital project, from their total income. As per the appellant, they received donations in three financial years from several assesses for their hospital project as detailed B below: Financial Rs. year 2015-16 10.97 crores 2016-17 20.55 crores 2017-18 3.84 crores C 9. The benefit of claiming deduction was, however, discontinued from the assessment year 2018-2019 by insertion of sub-section(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 D 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 E be withdrawn qua the appellant on the strength of insertion of sub-section (7) in Section 35AC of the Act. In other words, the challenge was on the ground that sub-section (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 sub-section(7), i.e., 01.04.2017. The challenge was also on the ground F that the Revenue cannot apply sub-section (7) retrospectively and withdraw the benefits, whether fully or partially, which were approved to the appellant. It was, therefore, contended that the appellant and the assessees should be held entitled to avail of the full benefit for the three financial years in terms of the notification dated 07.12.2015. G 11. The respondent (Revenue) supported insertion of sub-section

(7) in Section 35AC and inter alia contended that, firstly, insertion of sub-section (7) is prospective in nature; secondly, it operates qua every person alike the appellant irrespective of the approval granted by the Committee; Thirdly, sub-section (7), in clear terms, provides H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 835 OF INDIA [ABHAY MANOHAR SAPRE, J.] discontinuance of deduction only from the assessment year 2018-2019 A onwards; Fourthly, this intention of the legislature is clear from the perusal of the budget speech of the Minister of Finance, notes on clauses and memorandum explaining the amended provisions in the Finance Bill, 2016; Fifthly, the appellant not being an assessee under Section 35AC of the Act has no locus to raise the issue in question and nor they are, in any B way, affected due to insertion of sub-section (7); Sixthly, the appellant neither has any vested right in such matters nor has any right to set up a plea of promissory estoppel against the exercise of any legislative power such as the one exercised by the Parliament while inserting sub-section(7); and lastly, the appellant has already received substantial donations from several assessees for their hospital project during the two financial years C (2015-2016 and 2016-2017) and, therefore, there is neither any hardship nor any prejudice caused to the appellant due to insertion of sub-section (7) in Section 35AC of the Act.

12. The High Court, in the impugned order, repelled the challenge and while upholding the pleas raised by the respondent(Revenue) dismissed D the appellant’s petition, which has given rise to filing of this appeal by the appellant after obtaining special leave from this Court. 13. Heard Mr. Arvind Datar, learned senior counsel for the appellant and Mr. K. Radhakrishnan, learned senior counsel for the respondents. E 14. Mr. Arvind Datar, learned senior counsel appearing for the appellant reiterated the aforementioned submissions, which were urged in High Court, and while elaborating contended that the appellant so also the assesses, who made payment to the appellant in the financial year 2017-2018 should have been allowed to claim deduction during the F financial year 2017-2018 (Assessment Year 2018-2019) also notwithstanding insertion of sub-section (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) G 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. H 836 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 B SCC 409, R.K. Garg vs. Union of India & Ors., (1981) 4 SCC 675, Kasinka Trading & Anr. vs. Union of India & Anr., (1995) 1 SCC 274, Bannari Amman Sugars Ltd. vs. Commercial Tax Officer & Ors., (2005) 1 SCC 625, Shree Sidhbali Steels Ltd. & Ors. vs. State of U.P. & Ors., (2011) 3 SCC 193, Bajaj Hindustan Ltd. vs. Sir C Shadi Lal Enterprises Ltd. & Anr., (2011) 1 SCC 640 and Kothari Industrial Corporation Ltd. vs. Tamil Nadu Electricity Board & Anr., (2016) 4 SCC 134. 17. Having heard the learned counsel for the parties and on perusal of the record of the case, we are not inclined to interfere with the D impugned order of the High Court. 18. Section 35AC was inserted in the Act with effect from 01.04.1992 whereas sub-section (7), which is subject matter of this appeal, was inserted in Section 35AC with effect from 01.04.2017, which reads as under:

E “35AC. (1) Where an assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme, the assessee shall, subject to the provisions of this section, be allowed a deduction of the F amount of such expenditure incurred during the previous year : Provided that a company may, for claiming the deduction under this sub-section, incur expenditure either by way of payment of any sum as aforesaid or directly on the eligible G project or scheme. (2) The deduction under sub-section (1) shall not be allowed unless the assessee furnishes along with his return of income a certificate— H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 837 OF INDIA [ABHAY MANOHAR SAPRE, J.] (a) where the payment is to a public sector company or a A local authority or an association or institution referred to in sub-section (1), from such public sector company or local authority or, as the case may be, association or institution; (b) in any other case, from an accountant, as defined in the Explanation below sub-section (2) of section 288, in B such form, manner and containing such particulars (including particulars relating to the progress in the work relating to the eligible project or scheme during the previous year) as may be prescribed.

Explanation.—The deduction, to which the assessee is C entitled in respect of any sum paid to a public sector company or a local authority or to an association or institution for carrying out the eligible project or scheme referred to in this section applies, shall not be denied merely on the ground that subsequent to the payment of such sum D 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 E 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 sub-section (1), deduction shall not be allowed in respect of such expenditure under any F 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 sub-section (1), and subsequently— G (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 H 838 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (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 forth such particulars and within such time as may be prescribed, B the National Committee may, at any time, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, withdraw the approval: Provided that a copy of the order withdrawing the C approval shall be forwarded by the National Committee to the Assessing Officer having jurisdiction over the concerned association or institution. (5) Where any project or scheme has been notified as an eligible project or scheme under clause (b) of the Explanation, and subsequently— D (i) the National 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 such project or scheme was notified; or E (ii) a report in respect of such eligible project or scheme has not been furnished after the end of each financial year, in such form and setting forth such particulars and within such time as may be prescribed, such notification may be withdrawn in the same manner in F which it was issued:

Provided that a reasonable opportunity of showing cause against the proposed withdrawal shall be given by the National Committee to the concerned association, institution, public sector company or local authority, as the G case may be: Provided further that a copy of the notification by which the notification of the eligible project or scheme is withdrawn shall be forwarded to the Assessing Officer having jurisdiction over the concerned association, institution, H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 839 OF INDIA [ABHAY MANOHAR SAPRE, J.] public sector company or local authority, as the case may A be, carrying on such eligible project or scheme. (6) Notwithstanding anything contained in any other provision of this Act, where— (i) the approval of the National Committee, granted to an B association or institution, is withdrawn under sub-section (4) or the notification in respect of eligible project or scheme is withdrawn in the case of a public sector company or local authority or an association or institution under sub-section (5); or C (ii) a company has claimed deduction under the proviso to sub-section (1) in respect of any expenditure incurred directly on the eligible project or scheme and the approval for such project or scheme is withdrawn by the National Committee under sub-section (5),

the total amount of the payment received by the public D 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 sub-section (2) or the deduction claimed by a company under the proviso E to sub-section (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. F (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 G constituted by the Central Government, from amongst persons of eminence in public life, in accordance with the rules made under this Act; H 840 SUPREME COURT REPORTS [2019] 9 S.C.R. A (b) “eligible project or scheme” means such project or scheme for promoting the social and economic welfare of, or the uplift of, the public as the Central Government may, by notification in the Official Gazette, specify in this behalf on the recommendations of the National Committee.”

B 19. 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 C petition in the High Court. 20. Be that as it may, as rightly argued by the learned counsel for 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 D the appellant were not allowed to claim deduction of the said amount from their total income during the financial year 2017-2018. 21. 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. E 22. 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 F 35AC of the Act during the financial year 2017-2018.

23. 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. 24. The dispute is now confined only to third financial year, i.e., G 2017-2018 because for this year, the assessees were not allowed to claim deduction of the amount paid by them to the appellant on account of insertion of sub-section(7) in Section 35AC of the Act with effect from 01.04.2017. H PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION v. UNION 841 OF INDIA [ABHAY MANOHAR SAPRE, J.] 25. We are of the view that sub-section (7) is prospective in its A operation and, therefore, all the assessees were rightly allowed to claim deduction of the amount paid by them to eligible projects from their total income during two financial years, namely, 2015-2016 and 2016-2017. If sub-section (7) had been retrospective in its operation then the deduction for 2015-2016 and 2016-2017 too would have been disallowed. B 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 Cother 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 of the Act (see-M/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 sub-section was made D 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 no longer available due to efflux of time. In this view of the matter, even if the appellant received any E amount from any assessee for their project, no deduction could be allowed to such assessee either for the period 2017-2018 or for any subsequent period.

28. It was, however, stated by the learned counsel for the appellant that the appellant has received 3.84 crores during the year 2017-2018 F from various assessees. It was also stated that if sub-section(7) had been held not applicable to the appellant’s project then the appellant would have received much more amount than Rs.3.84 crores during the financial year 2017-2018, which is clear from the amount received by the appellant in earlier two years prior to insertion of sub-section(7), i.e., GRs. 10.97 crores during the financial year 2015-2016 and Rs. 20.55 crores during the financial year 2016-2017. 29. We find no merit in this submission. In a taxing statute, a plea based on equity or/and hardship is not legally sustainable. The constitutional H 842 SUPREME COURT REPORTS [2019] 9 S.C.R. A validity of any provision and especially taxing provision cannot be struck down on such reasoning. 30. Learned counsel for the appellant then urged that having regard to the fact that the appellant has set up a charitable hospital and that they were not able to receive more amount by way of donation for their B project in the third financial year 2017-2018, this Court may consider appropriate to invoke powers under Article 142 of the Constitution and allow the appellant to receive donation even for the third financial year in terms of the notification dated 07.12.2015 from their donors.

31. We are afraid, we cannot accept this submission for more C than one reason. First, as held above, 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 D 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. 32. Learned counsel for the appellant placed reliance on the decision of S.L. Srinivasa Jute Twine Mills (P) Ltd. (supra), Sangam E Spinners (supra) and CIT vs. Vatika Township Pvt. Ltd., (supra). In our view, in the light of the foregoing discussion and the findings recorded, the arguments based on the principle laid down in these decisions cannot be accepted. We, therefore, need not deal with this issue any more. F 33. In view of the foregoing discussion, we find no merit in the appeal. It is accordingly dismissed. Ankit Gyan Appeal dismissed. G H