Madras H.C : The question of allowability of deduction under s. 80U vis-a-vis earning capacity of the person has become rather controversial, especially with reference to cases decided by the Madras High Court.

High Court Of Madras

D. Syed Amanullah vs. CIT

Section 80U

Asst. year 1980-81

R. Jayasimha Babu & Mrs. A. Subbulakshmy, JJ.

TC No. 1676 of 1986

8th September, 1998

Counsel Appeared

C.V. Rajan, for the Petitioner : None, for the Assessee

EDITORIAL COMMENTS

The question of allowability of deduction under s. 80U vis-a-vis earning capacity of the person has become rather controversial, especially with reference to cases decided by the Madras High Court. A view contrary to the present decision has been taken by R. Jayasimha Babu, J. himself in the case of J.K. Abdul Jabbar vs. CIT (1998) 150 CTR (Mad) 658 by a judgment dt. 10th Sept., 1998. However, a somewhat similar decision had been taken by another learned judge in a judgment dt. 28th July, 1998, in the case of K.S. Srinivasan vs. CIT (1998) 150 CTR (Mad) 640. This decision was not referred in the case of J.K. Abdul Jabbar. Then again, in the case of V.M. Nithiyanam vs. CIT (1999) 157 CTR (Mad) 474, R. Jayasimha Babu, J. by a judgment dt. 13th Nov., 1998 reiterated the same view though with some additional caution without referring to any of the earlier decisions. The learned Judge held that deduction under s. 80U cannot be denied on the ground that assessee is having income; there is a duty cast upon the authority to appreciate the nature and extent of the disability and the impact on the disability on the income-earning capacity of the individual, having regard to the source of income of theindividual and the other relevant factors. The Division Bench (consisting of R. Jayasimha Babu & Mrs. A Subbulakshmy, JJ.) in CIT vs. K. Santhanakrishnan (2000) 159 CTR (Mad) 362 has taken the view that the fact that a person has a permanent disability which is certified by a doctor is sufficient to infer that such a person suffers a disadvantage and his ability to perform is deficient compared to a normal person and he cannot be denied relief under s. 80U because he is earning income.

JUDGMENT

R. JAYASIMHA BABU, J. :

The assessee claims the benefit under s. 80U of the IT Act, 1961, while he is gainfully employed as a senior assistant in the Central Co-operative Bank Ltd., Madurai Branch. Sec. 80U(1)(ii) of the Act provides that in computing the total income of an individual, being a resident, who, as at the end of the previous year is subject to or suffers from a permanent physical disability other than blindness, which has “the effect of reducing substantially his capacity to engage in a gainful employment or occupation” the deduction provided for in s. 80U shall be allowed. It is the assessee’s own case that he is indeed gainfully employed holding a post of senior assistant. Despite the deformity mentioned the certificate issued by a medical practitioner, viz., the deformity over the right wrist and fingers, he is able to do his work as an assistant in the bank and earn the salary attached to that post. It is evident that this deformity had not the effect of reducing substantially his capacity to engage in a gainful employment. The only material produced by the assessee was a certificate from the medical practitioner,certifying the existence of the deformity. No other material was referred to or relied on to show that the deformity had affected his capacity to engage in a gainful occupation or employment. The Tribunal, therefore, was right in the view it took and in denying the benefit to the assessee under s. 80U of the Act for the asst. yr. 1980-81. We, therefore, answer the question referred to us, viz., “whether, on the facts and in the circumstances of the case, the Tribunal is justified and correct in law in holding that the assessee is not entitled to the deduction contemplated by s. 80U of the IT Act, 1961?” against the assessee and in favour of the Revenue.

[Citation : 246 ITR 698]

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