AI Drafter 
TaxTMI 
TaxTMI 
2019 (1) TMI 226
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....e 'Act') provides for payment of annuity of lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu Undivided Family (HUF) in whose name subscription to the scheme stipulated in the said provision has been made. Though it is a long provision, for our purposes it would be suffice to reproduce sub-sections (1), (2) and (3) thereof, which are as under: "80DD. Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.- (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,- (a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person w....
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....eant for the benefit of persons with disability, LIC has floated insurance policy named 'Jeevan Aadhar (Table 114)' for the benefit of the handicapped dependants. Accordingly, those assessees who get the Jeevan Aadhar policy for the benefit of handicapped dependants and pay or deposit the amount under the said policy become entitled to the deduction mentioned in Section 80DD of the Act. Synopsis of the said policy introduced by the LIC gives a glimpse of the salient features of this plan and is, thus, reproduced below: "A) Synopsis of Plan 1) Age at entry (life assured) - Minimum 22 years, Maximum 65 years. (handicapped dependant - 1 year) The age of the life assured and handicapped dependant are required to be admitted on the basis of standard age proof. 2) Maximum premium ceasing age - 75 years. 3) Premium paying term - 10, 15, 20, 25, 30 & 35 years. 4) Policy term this is whole life plan. 5) Sum assured - Minimum 50000, Maximum - no limit. 6) Mode of payment - Yearly, Half-Yearly, Quarterly, Monthly, SSS, Single also. 7) Rebate on mode of payment - Yearly 3% of tabular premium, Half-yearly ....
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....paid under this policy meant for handicapped persons, this policy does not have maturity claim. The amount is payable to the dependant only on the demise of the proposer/life assured. 6) Submission of the petitioner is that by incorporating such a provision, the respondents are denying the benefit of the insurance to the handicapped persons to get annuity or lumpsum amount during the lifetime of the parent/guardian of such a handicapped person, whereas the beneficiaries of other life insurance policy are getting annuity during the lifetime of the person who has taken insurance policy. This, according to the petitioner, violates the fundamental right of equality of the handicapped person enshrined in Article 14 of the Constitution. 7) The petitioner states that he had lodged a complaint before the Insurance Regulatory and Development Authority of India (IRDA) on August 06, 2014. However, the said Authority in its reply expressed its inability to provide any help having regard to the afore-mentioned Circular dated January 24, 2008 of the CBDT. The petitioner even approached the Court of the Chief Commissioner for Persons with Disabilities raising the aforesaid grievance. The Ch....
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....holders for distribution of annuity through LLCs National Trust shall inform LIC for making National Trust as the nominee/Trusty for receiving the amount of annuity in respect of such policy holders on the terms & conditions as may be finalized between LIC and National Trust and ensure that a mechanism is put in place to disburse the amount of annuity to the disabled dependants of the policy holders till the dependant is alive. 15. Both the complainants strongly felt that like other policy holders, Jeevan Aadhar Policy should also be allowed to mature after 55 years of age of proposer and the annuity amount should be disbursed through the LICs of National Trust. 16. In the light of the demand of the complainants, CBDT is advised to once again examine the matter in consultation with Department of Empowerment of Persons with Disabilities, Ministry of Social Justice & Empowerment and National Trust." 8) The Chief Commissioner had even sent reminder thereof to the CBDT to look into the matter. However, nothing moved at the level of the CBDT. In fact, the petitioner thereafter lodged his grievance with the Prime Minister's Office through Centralised Public Grievance....
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....he disabled person even during the lifetime of the assessee. 10) Union of India has filed its affidavit giving justification for the aforesaid course of action. In this regard, it is submitted that vide Finance Act (No.2), 1998, Section 80DD was substituted for Sections 80DD and 80DDA. The earlier Section 80DD provided for a deduction of Rs. 15,000/- to an individual or HUF on account of any expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependant relative of an individual or member of HUF. The substitution was done to provide for composite Section in respect of deduction for expenditure on medical treatment, rehabilitation etc. and for payment made under a scheme of LIC or any other insurer for the dependant disabled person. Submission is that in effect Section 80DD amalgamates the provisions of the two sections, namely, 80DD and 80DDA. Thus, both erstwhile Section 80DDA and present Section 80DD provide that the annuity or lump sum amount for the benefit of the dependant who is a person with disability will be disbursed only after the death of the subscriber. Jeevan Aadhar scheme of LIC has been designed keeping in mind the ....
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.... Life Insurance Corporation or Unit Trust of India. It has been felt that the parents or guardian of handicapped dependants may not have to incur expenditure on medical treatment of a handicapped dependant every year. However, the parent or the guardian would always feel the need to provide for the future maintenance of the disabled dependant. The existing provisions do not take such situations into account. In order to allow a choice to the parent or the guardian to spend either on the medical treatment of or for the future need of the handicapped dependant, as the case may be, the Bill seeks to provide a new section 80DD. With this provision, the parent or the guardian could claim a deduction upto Rs. 40,000/- for the medical treatment and for future needs of the handicapped dependant in the manner most suited to his needs. The existing sections 80DD and 80DDA would get consequentially merged with increase in overall limit of deduction from Rs. 35,000 to Rs. 40,000/-." 13) Number of judgments were cited by the learned Additional Solicitor General appearing for the Union of India to placate the argument of discrimination based on Article 14 of the Constitution. Insofar as respo....
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.... namely, after the death of the parent/guardian. The presumption is that during his/her lifetime, the parent/guardian would take care of his/her handicapped child. 18) Further, such a benefit of deduction from income for the purposes of tax is admissible subject to the conditions mentioned in Section 80DD of the Act. The Legislature has provided the condition that amount/annuity under the policy is to be released only after the death of the person assured. This is the legislative mandate. There is no challenge to this provision. The prayer is that Section 80DD of the Act be suitably amended. This Court cannot give a direction to the Parliament to amend or make a statutory provision in a specified manner. The Court can only determine, in exercise of its power of judicial review, as to whether such a provision passes the muster of the Constitutional Scheme. Though, there is no specific prayer in this behalf, but in the body of writ petition, argument of discrimination is raised. Here, we find that the respondents have been able to successfully demonstrate that the main provision is based on reasonable classification, which as a valid rational behind it and there is a specific obje....
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.... (2001) 7 SCC 708, this Court held: "8. What Article 14 of the Constitution prohibits is "class legislation" and not "classification for purpose of legislation". If the legislature reasonably classifies persons for legislative purposes so as to bring them under a well-defined class, it is not open to challenge on the ground of denial of equal treatment that the law does not apply to other persons. The test of permissible classification is twofold: (i) that the classification must be founded on intelligible differentia which distinguishes persons grouped together from others who are left out of the group, and (ii) that differentia must have a rational connection to the object sought to be achieved. Article 14 does not insist upon classification, which is scientifically perfect or logically complete. A classification would be justified unless it is patently arbitrary. If there is equality and uniformity in each group, the law will not become discriminatory, though due to some fortuitous circumstance arising out of peculiar situation some included in a class get an advantage over others so long as they are not singled out for special treatment..." 22) The petitioner may be....