Income Tax Appellate Tribunal - Indore
Smt. Chandrakanta Jhavar vs Income-Tax Officer on 22 December, 1988
Equivalent citations: [1989]29ITD368(INDORE)
ORDER
S.K. Chander, Accountant Member
1. These appeals by the assessee are directed against the consolidated order of the AAO of Income-tax, A-Range, Indore, dated 14-9-1984 relating to assessment years 1981-82, 1982-83 and 1983-84. We are addressing ourselves to the issue of claim of the assessee for deduction Under Section 80U as at the time of hearing the other grounds of appeal were not argued before us.
2. The assessee, a lady, is partner in the firm of M/s. Skylines, Indore. But, it appears, as indicated in the assessment orders, her main source of income is from her personal business of money-lending. For all the years under appeal, she claimed deduction Under Section 80U of the Act. The ITO completed assessment for these three years simultaneously on 22-2-1984. The claim of the assessee for deduction Under Section 80U of the Act was negatived on the ground that the assessee's disease was not covered under the list of diseases as mentioned in the Board's Circular No. 246, dated 20-9-1978. The disease, to which the assessments find a reference was mentioned in the certificate filed by the assessee from a medical practitioner that she was under his treatment since August 1980 for acid peptic disease ; coronary Artery spasm extra cystolis. The Doctor, who gave the certificate was Dr. D. Mukerjee, M.D., Honorary Physician and Cardiologist, Indore Hospital and Research Foundation, who was as his letter head shows also a Consulting Physician and Cardiologist.
3. The assessments left the assessee aggrieved and were challenged in appeal before the AAC. Before the AAC certain decisions of the Income-tax Appellate Tribunal on Section 80U were cited. The AAC did not accept the certificate of Dr. Mukerjee on its face value. He summoned the Doctor Under Section 131 of the Act at the back of the assessee and examined him as to the effect of the disease from which the assessee was suffering. From the answers given by the Physician to the questions put by the Id. AAC, he inferred in his own manner that the physical disability to which the reference was made in the certificate by the Physician was not such that would reduce the capacity of the assessee substantially to engage in a gainful employment or occupation. He has given a reasoned order after examining the Doctor and rejected the claim of the assessee for deduction Under Section 80U of the Act by upholding the orders of the ITO and dismissing the appeals.
4. We have heard the parties and carefully considered their rival submissions. The 1d counsel for the assessee relied upon a number of judgments of the Tribunal beginning from a judgment of the Chandigarh Bench of the Tribunal in the case of Om Prakash v. ITO. The other judgments relied upon by him are as under :
1. Anand Prakash Saksena v. ITO [1983] 3 ITD 151 (Indore) ;
2. Jyoti L. Gandhi v. First ITO [1983] 3 ITD 295 (Bom.) ;
3. M.S. Chaudhari v. ITO [1984] 12 ITD 354 (Ind.) (Sic)
4. ITO v. Khemraj Jain [1985] 323 TTJ (Hyd.) 346 ;
5. S. Viswanathan v. ITO [1987] 15 ITD 23 (Mad.) ;
6. ITO v. R.N. Sehgal [1987] 17 TTJ (Chd.) 18 ;
7. Kunwar Narayan Gupta v. ITO [1986] 24 TTJ (Asr.) 558.
He also emphasised that, not only the 1d. AAC did not appreciate the ratio of these judgments in proper perspective but also he proceeded on with the case in a manner not justified in law because he examined the Doctor at the back of the assessee and did not afford an opportunity of cross-examination to the asaessee. He made a grievance that not only this, when the assessee filed applications to the 1d. AAC for supplying a copy of the statement of the Doctor on necessary payments for the same, the request was not acceded to. It was, thus, contended that the claim of the assessee has been erroneously rejected without appreciation either of the facts and circumstances of the case or the law applicable thereto. The orders of the AAC may, therefore, be reversed and necessary directions issued to the ITO to allow the claim in each year under appeal.
5. Opposing these submissions, the 1d. D.R. submitted that in the case of Om Prakash, the Tribunal had recorded that the assessee was suffering from a physical disability by which his working capacity had been reduced. In coming to this conclusion, the Tribunal had taken into consideration the nature of the disease and its chronicity. The disease was incurable and, therefore, the Tribunal in that case came to the conclusion that physical disability of the assessee was such that it had effected his capacity to engage in gainful employment. He also submitted that even the other judgment of the Tribunal cited by the 1d. counsel turned on their own facts. In the case of the assessee, the 1d. AAC had, after examination of the Doctor proved that the physical disability from which the assessee was suffering was not such as would effect substantially her capacity to engage in a gainful employment. Therefore, no case has been made out for an interference in the impugned orders by the assessee.
6. We have given careful consideration to the rival submissions. We have also carefully perused the orders of the authorities below. The evidence filed in the form of paper book by the assessee includes the certificate issued by the Doctor on 2-1-1984 reads as under:
This is to certify that Mrs. Chandra Kanta Jhawar aged 52 years, female, resident of 208-M.G. Marg, Indore, is under my treatment since August 1980 for her Acid Peptic disease ; Coronary artery spasm extra systolis. Pursuantto the se diseases her capacity to engage herself in a gainful occupation is substantially reduced.
7. The certificate is issued by an eminent Physician and Cardiologist. When the Doctor was examined by the 1d. AAC on summons, he confirmed before the 1d. AAC that the disease from which the assessee was suffering would reduce substantially her capacity to engage in a gainful employment. Prom the answers given by the Doctor, the 1d. AAC has drawn certain inferences showing, as if, in the medical field, he was more competent than the Physician. Unfortunately, he has not incorporated or made as an Annexure the entire statement of the Doctor recorded by him after summoning him at the back of the assessee. It has not been controverted by the revenue that despite applications made by the assessee, the copies of the statements recorded by the 1d. AAC were not furnished to the assessee.
8. The examination of the constituents of the total income of the assessee for all assessment years under appeal indicates that she was earning interest from money-lending in a substantial manner and that she was in the same manner personally occupied in the business and profession she was carrying on. The interest income received during the assessment years under appeal is as under:
S. No. Assessment Year Net interest
received
Rs.
1. 1981-82 25,902
2. 1982-83 27,312
3. 1983-84 28,777
Each year the assessee has paid professional tax of Rs. 250. The total income assessed in each year is less than the income received by way of interest because of loss in her share from the firm. But the fact regarding the applicability of Section 80U is embedded in each of the assessment orders itself which projects that by her professional application, she is earning substantial income as interest and is paying professional tax for carrying on that work. Therefore, in the scenario of this factual backdrop, the issue is whether under Section 80U, she is entitled to deduction.
9. We have perused the order of the Tribunal in the case of Om Prakash case (supra), which was reported in Income-tax Tribunal decisions and we find that the Tribunal after examination of the relevant provisions of law made the following observation :
A simple reading of the section shows that for purposes of claiming a deduction under this section, an individual who is resident at the end of the previous year in respect of an assessment year which the deduction is claimed should produce certificate from a registered medical practitioner as to the permanent physical disability referred to in the said clause. The section shows that once the terms of the sections are complied with by the assessee individual, the deduction is to be allowed under the mandate given by the Legislature because the words used are, 'there shall be allowed a deduction of a sum of five thousand rupees'. There is no further condition for claiming the said deduction. The section also shows that the Legislature has not left any thing to the Executive or for any subsidiary legislation so as to whittle down the relief granted by the Legislature. There even if a circular was issued by the CBDT, it could not be having any binding force on the authority below as it was not a circular beneficial to the assessee.
10. In the observations of the Tribunal reproduced reference to the circular is to that very circular, which is mentioned by the ITO in the impugned assessment orders.
11. It is seen that Section 80U of the Act has been renumbered as Sub-section (1) by the Finance Act, 1984 w.e. f. 1-4-1985. We also find that the words 'being a permanent physical disability specified in the rules made in this behalf by the Board' have been inserted by the Finance Act, 1984 w.e. f. 1-4-1985. Therefore, the amended provisions of Section 80U will apply to the assessment years 1985-86. The assessment years before us are 1981-82, 1982-83 and 1983-84. The law on the subject, therefore, will have to be considered as it was before the amendment. It appears that the observations of the Tribunal made in the case of Om Prakash (supra) that the section shows that the Legislature has not left anything to the Executive or for any subsidiary legislation so as to whittle down the relief granted by the Legislature were taken note of while making the amendment and the amendment has been made for authorising the CBDT to frame rules in this behalf. Be as it may, the position of law before the amendment governs the appeals before us.
12. From the certificate given by the doctor and from some of the questions about which replied of the doctor have been considered by the learned AAC, it appears that the disease from which the assessee was suffering was chronic and was effecting the assessee physically and substantially. The section before amendment indicated that it is only if any individual, who is a resident, at the end of the previous year is subject to or suffers from a permanent physical disability and such permanent physical disability effects substantially his- capacity to engage in gainful employment or occupation, the relief should be granted. The assessee ia earning substantial income from her profession of money-lending. This requires personal application and exertion. It can, therefore, not be said that the disease from which she was suffering does not link or did not reduce substantially her capacity to engage in gainful employment.
13. It is important to note that it is not, what the person suffering earns, but what is important to note is what the person suffering could earn, if he or she was not subject to or did not suffer from permanent physical disability. In our considered opinion, the authorities below, failed to appreciate this aspect and the facts of the case in refusing and rejecting the claim of the assessee under Section 80U for each of the assessment years under appeal. We, therefore, reverse their orders and direct that for each of the assessment years under appeal 80U deduction, as admissible in quantum for each assessment year, be allowed.
14. All the appeals allowed.