1982 (5) TMI 76 - AT - Income Tax

Appeal success for disability deduction based on medical evidence and statutory compliance.

The Tribunal allowed the appeal, directing the allowance of the deduction under section 80U(ii) for the assessee, emphasizing the legislative intent and ... Deductions, Physically Handicapped Persons Issues:- Whether the assessee is entitled to deduction under section 80U(ii) of the Income-tax Act, 1961.Analysis:1. The appeal concerns the entitlement of the assessee to a deduction under section 80U(ii) of the Income-tax Act, 1961 for the assessment year 1980-81. The assessee, an individual, declared a total income of Rs. 20,470 and subsequently claimed relief under section 80U(ii) based on a certificate from a medical practitioner proving permanent physical disability. The Income Tax Officer (ITO) denied the claim, stating that the disease did not substantially reduce the assessee's capacity for gainful employment, supported by income figures from previous years. The Appellate Assistant Commissioner (AAC) upheld the denial based on a circular from the Central Board of Direct Taxes (CBDT) and the nature of the disability, leading to the current appeal.2. The AAC's decision was based on the CBDT circular, which excluded pulmonary tuberculosis with bronchial asthma from qualifying as a permanent physical disability under section 80U(ii). However, the assessee provided a certificate from a registered medical practitioner confirming the permanent physical disability due to pulmonary tuberculosis with bronchial asthma, reducing the capacity for gainful occupation. The statute mandates a deduction of Rs. 5,000 for individuals with such disabilities, subject to producing a medical certificate, without additional conditions. The legislative intent is clear in granting relief directly without room for executive interpretation.3. The medical certificate presented by the assessee established the permanency and substantial impact of the disability on the capacity to work, aligning with the statutory requirements for claiming the deduction. The authorities' refusal to acknowledge the certificate's validity was unjustified, as the law does not empower the ITO to question a registered medical practitioner's certification. Furthermore, the chronic nature of the disease and its long-term effect on the assessee's capacity were disregarded by the authorities in their assessment, leading to an erroneous denial of the deduction.4. The ITO's reliance on the assessee's income from previous years to question the impact of the disability on gainful employment was misplaced. Section 80U(ii) focuses on the substantial reduction in capacity due to the disability, not the actual income earned. The ITO's approach failed to consider the statutory requirements and the essence of the deduction provision, resulting in an erroneous assessment. Ultimately, the Tribunal allowed the appeal, directing the allowance of the deduction under section 80U(ii for the assessee, emphasizing the legislative intent and the medical evidence supporting the claim.