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

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

Sub-section (7) of Section 35AC is prospective, applies uniformly, and precludes deduction for donations made in financial year 2017-2018 and subsequent years, regardless of prior approvals. Plea of promissory estoppel cannot be set up against legislative action. Constitutional validity of the amendment is upheld; neither appellant nor assessees have a vested right to tax concession after the statutory change.

Parties
Appellant: Prashanti Medical Services & Research Foundation; Respondents: Union of India & Ors.
Jurisdiction
India
Judgment Date
25 July 2019
Procedural Posture
Civil Appeal / Supreme Court Appeal From High Court Dismissal
Outcome
Appeal dismissed
Legal Topics
Income Tax Deduction, Validity of Statutory Amendments, Promissory Estoppel in Taxation, Interpretation of Prospective Statutes
Taxation Constitutional Law Income Tax Deduction Validity of Statutory Amendments Promissory Estoppel in Taxation Interpretation of Prospective Statutes

Case Brief

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Parties

Prashanti Medical Services & Research Foundation

Appellant

Union of India & Ors.

Respondents

Procedural Posture

Civil Appeal / Supreme Court Appeal From High Court Dismissal

Legal Issues

  1. 1 Whether the constitutional validity of sub-section (7) of Section 35AC of the Income Tax Act, 1961, can be challenged by the appellant
  2. 2 Whether the benefit of deduction under Section 35AC could be denied to assessees for donations made in financial year 2017-2018 due to insertion of sub-section (7)
  3. 3 Whether promissory estoppel applies against exercise of legislative power in taxation

Ratio Decidendi

Sub-section (7) of Section 35AC is prospective, applies uniformly, and precludes deduction for donations made in financial year 2017-2018 and subsequent years, regardless of prior approvals. Plea of promissory estoppel cannot be set up against legislative action. Constitutional validity of the amendment is upheld; neither appellant nor assessees have a vested right to tax concession after the statutory change.

Court Disposition

Appeal dismissed

Orders

  • The impugned order of the High Court is affirmed.
  • No interference with statutory amendment; deduction not available for assessment year 2018-2019 onward.