Section 35AC of the Income-tax Act, 1961, allowed businesses to claim deductions for expenditure incurred on projects or schemes approved by the National Committee for carrying out any eligible project or scheme for promoting the social and economic welfare of the public. This section was significant as it provided an incentive for businesses to contribute to social causes, thereby reducing their taxable income. The statutory test required that the project or scheme be approved by the National Committee, and the expenditure must be incurred on such approved projects. The burden of proof was on the taxpayer to demonstrate that the expenditure was indeed incurred on an approved project. In practice, this section encouraged corporate social responsibility by allowing businesses to support public welfare projects while benefiting from tax deductions. However, it is important to note that this section was withdrawn with effect from 1st April 2017.