Madras High Court
J.K. Abdul Jabbar vs Commissioner Of Income-Tax on 10 September, 1998
Equivalent citations: [1999]237ITR389(MAD)
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT R. Jayasimha Babu, J.
1. While rejecting the assessee's claim for deduction under Section 80U of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), in the order of the Commissioner, it is not stated that the assessee is not a handicapped person. The medical certificate produced by the assessee shows that the assessee is suffering from permanent physical disability of more than 50 per cent, in the right leg and the disability exists from January, 1979. The relief under Section 80U of the Act was sought for the assessment years 1986-87 to 1988-89, The application revision petition under Section 264 of the Act was filed on April 13, 1990. The Commissioner rejected the application on the ground that the assessee's income rose from Rs. 29,790 in 1986-87 to Rs. 49,040, in 1988-89 and so it could not be said that the physical disability had led to reduction in his capacity to engage himself in gainful employment or occupation. The income derived by the assessee was by money-lending and from shares from certain firms. The assessee also owned immovable properties.
2. Learned counsel for the assessee contended that the order of the Commissioner is plainly contrary to the terms of Section 80U of the Act and that section is a beneficial provision meant to provide some relief to the assessees who are totally blind or physically handicapped and who are mentally retarded. The fact that the assessee's income had risen cannot be held against him for the purpose of denying relief under Section 80U of the Act. The relief is meant to be given to the assessees who are handicapped. Counsel relied on Section 80U(2) of the Act which provides that in making rules, the Board shall "for specifying any disability or mental retardation for the purposes of Clause (ii) or Clause (iii), as the case may be, of Sub-section (1), have regard to the nature of such disability or mental retardation and the effect which such disability or mental retardation is likely to have on the capacity of a person subject thereto, or suffering therefrom, to engage in a gainful employment or occupation".
3. It was submitted by counsel that the Board, while specifying the disability, is required to duly take note of the effect of the disability on the earning capacity and if the disability is specified by the Board in a rule, such physical handicap must be regarded as having an adverse effect on the income earning capacity of the person with such a handicap. Counsel invited my attention to Rule 11D of the Income-tax Rules which provides that for the purposes of Section 80U(1)(i) permanent physical disability shall be regarded as a permanent physical disability if it falls in any one of the categories specified below, namely :--
(a) permanent physical disability of more than 50 per cent, in one limb ; or
(b) permanent physical disability of more than 60 per cent, in two or more limbs ; or
(c) permanent deafness with hearing impairment of 71 decibels and above ; or
(d) permanent and total loss of voice.
4. The assessee here suffers from physical handicap of more than 50 per cent, in one limb as seen from the certificate issued by the doctor. The physical disability of the assessee, therefore, is one which clearly falls within Rule 11D, Clause (i)(a) and is thus "physical disability" for the purpose of Section 80U of the Act. Having regard to the beneficial object of these provisions, the further enquiry as to whether the earning capacity has been adversely affected by reason of the disability, was unnecessary, as that factor had been taken note of by the Board when it specified the disability as one which qualifies as a disability under Section 80U of the Act and Rule 11D of the Rules. Moreover, the assessee here was not employed on full time basis in any concern. The income that he receives was from his owning of a property and also from money-lending and share income from certain firms. His physical disability would certainly impose limitation on the ease with which he could move from place to place and would also reduce his efficiency to some extent. The income earned by him does not constitute conclusive proof that his disability does not have an adverse effect on his earning capacity. The object of specifying the disability in the rules framed by the Board is to avoid enquiry of the kind sought to be made by the Commissioner as it is to be presumed that the person who suffers from such disability would also suffer a deduction in his earning capacity by reason of that disability. The whole object of that section will be defeated if the benefit is denied to a handicapped person or a totally blind person, merely on the ground that his income has risen from one year to the next, The fact that the person has been able to, to some extent, overcome his handicap is not to result in a penalty being visited on him by way of denying the benefit for which he would otherwise be eligible. If the provision is as it should be construed liberally, persons who are handicapped must be entitled to the benefit of deduction provided for in that section if the handicap is one which is specified in the rule. That a liberal construction should be placed on Section 80U of the Act is also the view of the Allahabad High Court in the case of Sardar Harpreet Singh v. CIT [1991] 187 ITR 679, wherein it was observed that it is not a condition precedent for allowing the deduction under the provision that the assessee should be unemployed or should not be earning anything. Further, merely because the assessee has an income from some business, deduction under Section 80U of the Act cannot be disallowed, for, had he not suffered from a permanent disability, he could have earned more.
5. So far as the assessment year 1986-87 is concerned, the application had been filed beyond the time prescribed under Section 264(3) of the Act and the assessee had not filed an application to condone the delay in making the application for that assessment year. Hence, the writ petition in respect of the assessment year 1986-87 is dismissed.
6. The writ petitions in respect of the assessment years 1987-88 and 1988-89 are allowed. The impugned orders are quashed and the assessee shall be granted the benefit of deduction under Section 80U of the Act for these assessment years.