Income Tax Appellate Tribunal - Delhi
M.C. Bass vs Income-Tax Officer on 22 June, 1987
Equivalent citations: [1987]23ITD267(DELHI)
ORDER
S.S. Mehra, Judicial Member
1. Assessee by this present appeal challenges order dated 4-3-1985, of the learned. CIT(A), Bareilly, for the assessment year 1981-82. The only issue pressed before us by the learned counsel on behalf of the assessee was that the lower authorities should have accepted the claim of the appellant under Section 80U for Rs, 10,000. Ground Nos. 2 to 4 are arguments in favour of the above grounds and ground No. 5 was not argued. We thus proceed to determine the correctness of the learned CIT(A)'s action in confirming the denial of assessee's claims under Section 80U.
2. Assessee by status is an individual and an agent of M/s. J.B. Mody Brothers, Sheth Govindrao Smriti, 83 OCD Annie Besant Road Worli Naka, Bombay-400013. He received salary as well as commission from this firm. The assessee dealt in medicines. He made the sales of medicines and received commission thereon. A copy of the agreement with the employer entered into on 12-2-1968 was filed before the learned ITO. The receipt of salary was shown as per certificate at Rs. 6,336 and business commission at Rs. 2,25,544. Assessee appears to have filed during the course of hearing before the learned ITO a claim Under Section 80U of the I.T. Act, 1961. The learned ITO noted the commission receipts from 1975-76 to 1981-82. The learned ITO further noted that the disease from which the assessee was suffering namely Anginea-Moderate Hypertension did not amount to a heart disease and the assessee could not be called a heart patient. It was also noted that the assessee was appointed as sales supervisor for the State of U.P. and was earning substantial commission. The assessee appears to have produced two medical certificates during the assessment proceedings. The learned ITO noted that the assessee did not fulfil the conditions necessary for allowing relief Under Section 80U of the Act and further noting the amount of commission received during the year under consideration, disallowed the assessee's claim Under Section 80U of the Act.
3. The denial of assessee's claim Under Section 80U of the Ace was subsequently contested by the assessee. It was submitted before the learned CIT(A) by Shri T.N. Agarwal, the learned counsel that the learned ITO was not justified in observing that the assessee was not a heart patient. Certain medical publications were also produced before the learned CIT(A) to show that the disease the assessee was suffering from was capable of leading to coronary insufficiency which may lead to myocardial infraction on stress and strain. It was further argued that although the assessee was continuing to work for his company but was only because he was a qualified person and was well versed with the medical problems and under proper medical advise and check up and in fact without over exerting himself he was able to do his job. It was contended that ultimately the disease adversely effected his working capacity. A chart was submitted showing the sales, percentage of achievement, growth over last year, penalty during the medical representative's and commission earnings for the years from 1977-78 to 1983-84. It was argued before the learned CIT(A) that from the financial year 1980-81 onwards there was a decline in the performance of the assessee and that he was not achieving 100 per cent of his target and on that basis it was emphasised that the heart disease was having an adverse effect on his employment. The learned CIT(A) after analysing this section and commenting upon the certificates etc. refused to interfere with the following observation :
From the chart which has been reproduced in a paragraph above, it is seen that the appellant has been performing these functions admirably and has been successfully leading a team of normally 20 medical representatives in a vast area and has earned substantial commission which in the year under consideration has exceeded Rs. 2,00,000. The slight fall in the percentage of achievement to which the learned authorised representative and the appellant have referred does not necessarily mean that there has been a decline in the efficiency with which the appellant was discharging his functions. Most of the modern organisations now-a-days prescribe optimum target of achievement by their executives and to come across instances of marginal shortfall is not uncommon. These shortfalls can be due to various factors and it cannot be assumed that a physical disability is the only cause which leads to a shortfall in relation to the targeted results. Even if it is assumed that the slight shortfall in the percentage of achievement was due to the occurrence of the disease, it would still not be enough be bring the case within the ambit of Section 80U because Section 80U speaks of a 'substantial' reduction in the assessee's capacity to engage in gainful employment or occupation. Certainly the above chart does not indicate any such substantial reduction, nor does the fact that the appellant is still discharging his functions in relation to the area assigned to him and still earning substantial commission which exceed Rs. 2,00,000 give such indication. In fact, Section 80U is, in my opinion, not meant to cover cases like this. It will be seen that Clause (i) of Sub-section (1) of Section 80U speaks of an assessee who is totally blind and Clause (ii) speaks of other permanent physical disabilities. Obviously, Section 80U is meant to give a small recompense to assessees who have been visited by a grave misfortune and an assessee who has been spared such a calamity should not make an effort to somehow by recourse to legal verbiage, try to bring his case within the ambit of the concerned section.
4. The assessee is now in further appeal before us against the said finding of the learned CIT(A). Shri O.P. Sapra, learned counsel contended before us that the learned CIT(A) was not justified to confirm an erroneous action of the learned ITO in not considering the assessee's claim Under Section 80U of the Act when according to him all conditions necessary for allowing relief in the matter were satisfied. Our attention was invited by the learned counsel to pages 3 and 4 of the paper book being portions of some sort of written submissions said to have been filed on behalf of the assessee before the learned OIT(A). Mention was also made of page 9 of the paper book containing copies of medioal certificate dated 2-1-1984 and 3-3-1980. At page 3 of the paper book was shown to be placed a copy of appointment letter dated 1-7-1983. Mention was also made of page 10 of the paper book being a copy of order of the ITAT, Ahmedabad Bench in P.K. Parek [IT Appeal No. 248 (And.) of 1981] for the asstt. year 1977-78. On the basis of the above material it was submitted by Shri Sapra that the assessee was suffering from a permanent physical disability and as a result thereof his income had gone down and, therefore, deduction Under Section 80U of the Act should have not been disallowed. Shri Sapra also made mention of the following decisions:-
(a) in the case of Anand Prakash Saksena v. ITO [1983] 3 ITD 151 (Indore);
(b) in the case of Om Parkash v. ITO [1982] 1 ITD 1060 (Chd.) ;
(c) in the case of CIT v. L.G. Ramammthi [1977] 110 ITR 453 (Mad.) ; and
(d) in the case of Surjidevi Kunjilal Jaipuria Charitable Trust v. CIT [1978] 114 ITR 685 (All.).
5. On behalf of the revenue the learned departmental representative Shri O.S. Bajpai supported the orders of the authorities below and contended further that Section 80U in the circumstances of the assessee's case was inapplicable. It was mentioned by Shri Bajpai that during the relevant financial year there was no decrease in the commission. It was also pointed out that the assessee was not suffering from any permanent disability. According to the learned departmental representative the case relied upon on behalf of the assessee being distinguishable on facts were of no relevance. It was also pointed out that no proper medical certificates were brought on record for meeting the requirements of the situation. Shri Bajpai also made mention of Rule 11D of the I.T. Rules, 1962 to contend that no doubt the same was with effect from 1-4-1985 but was definitely applicable to the pending cases.
6. In reply the learned counsel Shri Sapra contended that the Rule supra did not apply as the assessee was suffering from permanent disability.
7. Submissions made on behalf of the contesting parties have been heard and considered and record carefully perused.. As discussed earlier he was working with M/s. J.B. Modi Brothers and was receiving salary and commission. A chart showing sales targets and achievements of the assessee since 1977-78 was produced before the lower authorities in the following manner :
____________________________________________________________________ Years Targets Sales %of Growth Penalty No. of Commission lac. achieve- achv. Over med. Earned ment in last rep.
lac. Year ____________________________________________________________________ 1 2 3 4 5 6 7 8 ____________________________________________________________________ 1977-78 60.00 60.51 100% 26% Nil 13 93,088 1978-79 76.28 76.30 100% 26% Nil 16 1,40,808 1979-80 96.00 96.00 100% 25.8% Nil 17 1,62,250 1980-81 125.00 122.66 98% 30% Nil 17 2,25,540 1981-82 186.00 165.00 88% 32% 10,000 18 3,00,970 1982-83 204.82 167.00 82% 1% 26,000 19 2,95,000 1983-84 215.86 205.61 95% 23% 40,000 20 2,85,000
8. It appears to have been the assessee's case before the lower authorities that the assessee was suffering from the disease mentioned in the medical certificate dated 20-1-1984 and 3-3-1980, copies placed at page 9 of the paper book and that on account of the said disease the assessee was suffering from a permanent disability and on account of that his business income went down. Certificate dated 20-1-1984 contains that the assessee was under the treatment of Dr. Suresh Sondhi since January, 1980 as a patient of Anginea-Moderate-Hypertension. Another certificate dated 3-3-1980 indicates that the assessee was under the treatment of Dr. Arun Chaturvedi for Ischemic Heart disease since last 4 months and was advised rest. This appears to be the portion of the medical certificates said to have been produced on behalf of the assessee before the lower authorities.
9. The assessee's claim was Under Section 80-U of the Act. According to the said section deduction of Rs. 10,000 will be allowable if the individual was totally blind or was subject to or suffering from a permanent physical disability specified under the Rules made in this behalf by the Board and which had the effect of reducing substantially his capacity to engage in a gainful employment or occupation. Thus according to the said section relief will be allowable if the assessee was suffering from the type of disease or disability mentioned in the section and to that effect a certificate from a registered medical practitioner was produced. As mentioned earlier on behalf of the assessee the certificates dated 20-1-1984 and 3-3-1984 are said to have been filed.
10. For proper prbeessing of Section 80-U of the Act the Rule appears to have been framed with effect from 1-4-1985 and the relevant Rule 11-D which says that for the purpose of Section 80-U the permanent physical disability shall be recorded on account of the following :
(a) permanent disability of more than 50 per cent in one limb, or
(b) permanent disability of more than 60 per cent in two or more limbs ; or
(c) permanent deafness with hearing impediments of 71 decibles and above ; or
(d) permanent and. total loss of voice.
11. No doubt, Rule 110 was inserted with effect from 1-4-85 but being merely of procedural nature, in our view, was applicable to all the pending assessments. In fact the right emanates from this section and the Rule provides only as to what could constitute evidence in support of the claim.
12. In the light of the above discussion the certificates brought on record on behalf of the assessee are required to be read in the light of Rule 11D of the Rules. The assessee is said to be under treatment as a patient of Anginea-Moderate Hypertension and Coronary insufficiency. When these two situations are read simultaneously with the four situations mentioned in the Rule, it becomes more than clear that the assessee's case was not at all covered by the contents of the Rule. These are the inferences after perusing the medical certificates and the Rule. No doubt the assessee has brought medical certificates from the registered medical practitioners but the contents thereof did not satisfy the requirements of law. Moreover we are concerned with the period from 1-4-1980 to 31-3-1981. None of the certificates brought on record are covering the period we are concerned with. On account of this also the certificates are of no consequence. The chart mentioned herein-above clearly indicates that for the year under consideration i.e. 1981-82 the assessee's commission income was highest in 7 years mentioned therein i.e. at Rs. 3,00,970. The highest income does not give indication that for the year under consideration the assessee's earning capacity had declined. So on account of this also the assessee has not proved that he was entitled to deduction Under Section 80U of the Act. On account of permanent disability reducing the assessee's earning capacity.
13. The learned counsel Shri Sapra made mention of the finding of the ITAT, Chandigarh Bench in the case of Om Parkash (supra). It is sufficient to say with regard to that that perhaps the relief was allowed on production of the mere certificate from the medical practitioner. We thus with due reference to the Chandigarh Bench of the ITAT, are of the view that the said finding in the case of the assessee before us, because of the peculiar facts and the position, cannot be of any assistance. Shri Sapra also made mention of another finding of the Indore Bench of the ITAT in the case of Anand Prakash Saksena (supra). In the said case the assessee was suffering from a permanent physical disability i.e. defective hearing. That position is not seen to be existing in the case before us. Therefore, the assessee, in our view, was not justified to expect any support from the said finding of the Tribunal.
14. On behalf of the assessee mention was also made of the case of L.G. Rarnamurthi (supra). The finding of the Hon'ble Madras High Court appears to be in the context when the situations before the two Benches of the Tribunal were similar. It is not seen from the ratio that the earlier finding of the Bench will be required to be followed even if the factual position was at variance. The Tribunal's order relied upon by the assessee in the case before us are found to be inapplicable on account of the factual dissimilarities. Therefore, by the assessee any reference to the ratio in the case of L.G. Rarnamurthi (supra) appears to be misconceived. Mention was also made on behalf of the assessee of the ratio, in the case of Surjidevi Kunjilal Jaipuria Charitable Trust (supra). After perusing the case we could not in fact grasp the relevance of the mention by the learned counsel. We leave it at that.
15. In the flight of the preceding paragraphs we are satisfied that the learned ITO correctly disallowed the assessee's claim Under Section 80U of the Act and such action was correctly confirmed by the learned CIT(A). We see no merit in the assessee's present appeal.
16. No other ground was either raised or pressed before us. The paper book has been considered.
17. In the result, the appeal is dismissed.