TMI Blog1988 (7) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ally his capacity to engage in a gainful employment or occupation. It is not enough if an assessee proves by the production of a certificate from a doctor that he suffers from a permanent physical disability. He should further prove that his physical disability has reduced substantially his capacity to engage himself in a gainful employment. Whether a person s capacity is substantially reduced by his physical disability or not is a matter of fact which can be judged by the various circumstances. In the instant case of the assessee I find that he has been working with the Life Insurance Corporation as a Stenographer and deriving an income (gross emoluments) of ₹ 35,730 from his employer. This fact goes to show that the disability of his has not had the effect of reducing substantially his capacity to engage himself in a gainful employment. He also referred to Circular No. 246 dated 20-9-1978 and Circular No. 429 dated 8-8-1985 issued by the Central Board of Direct Taxes but held that the circulars did not mean that every employee suffering from a permanent physical disability should be granted automatic deduction under s. 80U. In this view of the matter, he drew adverse i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Murty, learned departmental representative, submitted that the assessee is already engaged in a gainful employment as a stenographer with the Life Insurance Corporation of India notwithstanding his disability and, therefore, the assessee was not entitled to deduction under s. 80U. He also submitted that it should- be shown that the assessee was not only suffering from a permanent disability as specified in the Board s circular but it should also be proved to the satisfaction of the Income-tax Officer that the disability resulted in preventing the assessee from engaging in gainful employment. There is a conjunctive and used in s. 8OU which would mean that it is not enough for the assessee to suffer from a permanent disability but it is also necessary that such disability disabled the assessee from having gainful employment. This test not having been satisfied in the case of the assessee, the Commissioner rightly interfered by invoking his jurisdiction under s. 263(1) of the Income-tax Act. 5. Having regard to rival submissions and the materials on hand, we vacate the order of the learned Commissioner of Income-tax. The assessee suffers from Post Polio Paralysis of left lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the permanent physical disability from a registered medical practitioner. 3. The question under consideration is the scope of the expression permanent physical disability. The Board has in consultation with the Ministry of Health, evolved the following guidelines for the purposes of section 80U. Section 80U providing a deduction of ₹ 5,000* in cases of assessees computing the total income of an individual should apply if a person suffers from the following permanent physical disabilities: ****** (Underlining is ours - *Increased to ₹ 10,000 by Finance (No.2) Act, 1980, w.e.f. 1-4-1981). From the italicised portion of the circular extracted above, it will be obvious that if a person suffers from the kind of disability illustrated in the circular, the underlying assumption is that such a defect or deficiency has the effect of reducing the capacity of the person to engage in a gainful employment and no further proof is necessary except to prove such disability in the form of a medical certificate as provided for in the section. The learned Commissioner erred in assuming that the assessee has to further prove that his physical disability has in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, apply in relation to the assessment year 1985-86 and subsequent years. As a result of this amendment, in order to avoid litigation, rule 11D of the Income-tax Rules was inserted by the Income-tax (Fourth Amendment) Rules, 1985 [Notification No. SO 529 (E), dated 17-7-1985] with effect from 1-4-1985, which is as follows : 11D. Permanent physical disabilities for the purposes of deduction under section 80U.-A permanent physical disability shall be regarded as a permanent physical disability for the purposes of clause (ii) of sub-section (1) of section 8OU 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. Thus, for the assessment year 1985-86,- if the assessee suffers from a permanent physical disability not of a minor nature but as specified in the rules, he is entitled for deduction, and here again, there is an inbuilt assumption that such permanent di ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
