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1998 Supreme(Mad) 995
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. JAGADEESAN
K. S. Srinivasan - Appellant
Versus
Commissioner of Income Tax - Respondents
W.P. Nos. 11268 to 11270 of 1989
Decided On : 28 July 1998
THE REQUIREMENT OF SECTION 80U(1)(II) IS THAT NOT ONLY THE PETITIONER SHALL SUFFER FROM PERMANENT DISABILITY AS SPECIFIED IN THE RULES BUT ALSO SUCH PERMANENT DISABILITY HAS THE EFFECT OF REDUCING SUBSTANTIALLY HIS CAPACITY TO ENGAGE IN A GAINFUL EMPLOYMENT OR OCCUPATION.
Headnote:
INCOME TAX - SECTION 80U(1)(II) - RULE 11D - DEDUCTION FOR PERMANENT PHYSICAL DISABILITY - INTERPRETATION - COURT HELD THAT THE PERMANENT DISABILITY MUST REDUCE SUBSTANTIALLY THE CAPACITY TO ENGAGE IN GAINFUL EMPLOYMENT OR OCCUPATION.
Fact of the Case:
THE PETITIONER, AN EMPLOYEE OF A FOREIGN BANK, SUFFERING FROM PERMANENT DEAFNESS, CLAIMED DEDUCTION UNDER SECTION 80U(1)(II) OF THE INCOME-TAX ACT, 1961. THE AUTHORITIES REJECTED THE CLAIM ON THE GROUND THAT THE DISABILITY DID NOT REDUCE SUBSTANTIALLY HIS CAPACITY TO ENGAGE IN GAINFUL EMPLOYMENT.
Finding of the Court:
THE COURT HELD THAT THE PETITIONER WAS NOT ENTITLED TO THE DEDUCTION SINCE HE HAD NOT FULFILLED THE SECOND CONDITION OF SECTION 80U(1)(II), I.E., THAT THE PERMANENT DISABILITY HAD THE EFFECT OF REDUCING SUBSTANTIALLY HIS CAPACITY TO ENGAGE IN A GAINFUL EMPLOYMENT OR OCCUPATION.
Issues: WHETHER THE PETITIONER WAS ENTITLED TO THE DEDUCTION UNDER SECTION 80U(1)(II) OF THE INCOME-TAX ACT, 1961.
Ratio Decidendi: THE COURT INTERPRETED SECTION 80U(1)(II) AND RULE 11D OF THE RULES FRAMED UNDER THE ACT AND HELD THAT THE PERMANENT DISABILITY MUST REDUCE SUBSTANTIALLY THE CAPACITY TO ENGAGE IN GAINFUL EMPLOYMENT OR OCCUPATION.
Final Decision: THE COURT DISMISSED THE WRIT PETITION.
1. The petitioner has filed these writ petitions seeking a writ of mandamus to quash the proceedings of the respondents whereby the petitioner was rejected the relief under section 80U(1)(ii) of the Income-tax Act, 1961 ('the Act') and directing the respondents to grant the said relief.
2. The case of the petitioner is that he is an employee in the Standard Chartered Bank, Madras, as assistant. He filed the income-tax returns for the years 1985-86, 1986-87 and 1987-88. After filing the returns, he claimed the benefit under section 80U(1)(ii) since the petitioner was a permanently physically disabled person afflicted with almost total deafness in both the ears. The petitioner filed a petition under section 264 of the Act before the first respondent, claiming the benefit and the same was rejected and the petitioner preferred an appeal before the second respondent which was also rejected. Hence, the present writ petition has been filed.
3. The respondents have filed counter contending that the petitioner is not entitled for the benefit of section 80U(1)(ii), since the petitioner's permanent physical disability has not the effect of reducing substantially his capacity to engage in a gainful employment or occupation. The fact that the petitioner is employed and getting a four figure salary itself will establish that he is in gainful employment or occupation.
4. The learned counsel for the petitioner contended that section 80U(1)(ii) clearly specifies the persons who are entitled for the deductions and also the physical disability. Rule 11D framed under the said Act explains the permanent disability for the purpose of deduction under section 80U and as per the rules where permanent deafness with hearing impairment of 71 decibels and above is there, such persons will be entitled for the deductions as provided under section 80U(1)(ii). The petitioner has produced a medical certificate to the effect that the petitioner is suffering from hearing impairment of 80 decibels and as such, petitioner is entitled for the benefit of deduction in accordance with section 80U(1)(ii). But for this disability, the petitioner would have got promotion. But only due to the permanent disability of deafness, the petitioner was not promoted and thereby the petitioner has lost the opportunity of further promotions and further increments. Further due to the permanent disability the petitioner has lost the better employment and better earning. Hence, the petitioner is entitled for the deduction in accordance with section 80U
5. On the contrary, the learned senior counsel for the respondents contended that section 80U(1)(ii) contemplated two conditions for getting deductions : one is permanent disability specified in the rules; and the other is such permanent disability must be to the effect of reducing substantially the capacity to engage in a gainful employment or occupation.
6. So far as the compliance of the first condition is concerned, there is no dispute. The authorities below have considered the fulfilment of the second condition and found that the petitioner has not fulfilled the second condition and as such, he will not be entitled for the deduction. The petitioner is employed in a foreign bank and earning a sum of Rs. 5, 000 p.m. and as such, it cannot be said that the permanent disability is to the effect of reducing substantially his capacity to engage in a gainful employment or occupation.
I carefully considered the contentions of both the counsels. Section 80U is as follows:
"Deduction in the case of totally blind or physically handicapped resident persons. - (1) In computing the total income of an individual, being a resident, who, as at the end of the previous year, -
(i) is totally blind, or
(ii) is subject to or suffers from a permanent physical disability (other than blindness) being a permanent physical disability specified in the rules made in this behalf by the Board, and which has the effect of reducing substantially his capacity to
