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TMI Blog1984 (3) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... nce there is a ceiling of 30 per cent of gross total income for allowance of relief under section 80C, sub-section (4) thereto, the ITO restricted the relief to Rs. 8,553 which is the eligible amount at 100 per cent for first Rs. 5,000, 50 per cent for next Rs. 5,000 and 40 per cent of balance out of qualifying amount Rs. 12,635 forming 30 per cent of the income determined at Rs. 42,116. The assessee in first appeal contended that Rs. 12,635 (claimed at Rs. 12,564 at 30 per cent of returned figure) was to be reckoned as the ceiling on the final eligible amount and not on the qualifying amount under section 80C(1) itself. The assessee argued that it, interpretation is justified by the decision of the Andhra Pradesh High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Relief to be limited to 12,635 Relief to be limited to 8,554 (Being 30 per cent of 42,116) That is how the assessee would claim the relief of Rs. 12,635 while the ITO would allow only Rs. 8,554. 5. Relevant portions of section 80C for our purposes read as under : " 80C. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section an amount calculated, with reference to the aggregate of the sums specified in sub-section (2), at the following rates, namely :--- (a) where such aggregate does not exceed the whole of such aggregate ; Rs. 5,000 (b) where such aggregate exceeds Rs. 5,000 plus 50 per cent of Rs. 5,000 but does not exceed the amount by which such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0C(2) and 80C(4) are read together, only an amount of Rs. 12,635 out of the premium paid to the extent of Rs. 32,561 qualifies for deductions to be reckoned under section 80C(1). The ' aggregate of the sums ' on which relief has to be computed under section 80C(1) gets, therefore, reduced in the threshold itself, so to say, in view of section 80C(4) which puts the ceiling on the amount under section 80C(2). In other words, the ceiling under section 80C(4) is on the qualifying amount of premia paid under section 80C(2) and not on the eligible amount of relief (deduction) under section 80C. There is no ambiguity in the wording of the statute even to admit of a doubt in favour of the assessee's claim. We have, therefore, to uphold the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80C(4) while the opening words in section 80G(4) are ' The deduction under sub-section (1) shall not be allowed . . . '. In view of this difference, we will not be justified in conceding the assessee's claim with reference to the Andhra Pradesh High Court decision. We may also point out that section 80G(4) has since undergone an amendment vide the Finance (No. 2) Act, 1980, making it clear that the ceiling in that sub-section also applies to donations (qualifying amount) and not to the deductions (eligible relief). The relevant part of the Notes on Clauses on the Bill reads as under : " Sub-clause (a) seeks to substitute sub-section (4) of section 80G. Under the proposed amendment, it is being clarified that the deduction in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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