B. Indiramma vs Income Tax Officer

P.R. Ramachandra Menon, J.—The petitioner has approached this Court challenging Ext. P6 order passed by the second respondent, whereby the revision petition filed by him has been rejected, upholding Ext. P3 order passed by the 1st respondent, substantially varying and modifying Ext. P1 order passed earlier, wrongly invoking the power u/s 154 of the Income Tax Act for rectifying the mistake apparent on the face of the record.

With regard to the sequence of events, it is to be noted that the petitioner is a physically handicapped person with substantial extent of disability and was enjoying the benefit of deduction as provided u/s 80U of the Income Tax Act (''the Act''). It is the case of the petitioner that assessment with respect to the year 1992-93 was finalized by the first respondent as per Ext. P1 order and the liability fixed on the petitioner was satisfied by him. Subsequently, the 1st respondent issued Ext. P2 notice stating that the matter required to be re-examined, stating that the deduction u/s 80U already allowed in the case of the petitioner was liable to be withdrawn, particularly since the certificate produced by the petitioner did not show that he was having permanent disability of more than 50 per cent, which is cited as a mandatory requirement by virtue of the relevant rule amended with effect from 1-4-1992.

Immediately on receipt of Ext. P2 notice, the petitioner preferred a petition objecting the same, despite which, the first respondent passed Ext. P3 order denying the benefit of deduction to the petitioner, for the reason that the petitioner did not have the requisite extent of disability of 50 per cent so as to make him eligible to avail the benefit u/s 80U of the Act, which in turn was subjected to challenge by filing Ext. P4 revision before the second respondent. Along with the revision petition, the petitioner had also produced Ext. P4(a) Disability Certificate, showing that his permanent disability was assessed at ''55 per cent'' by the Medical Board of the District Hospital, Kollam. However, the second respondent did not choose to accept the said certificate and passed Ext. P6 order confirming Ext. P3 passed by the 1st respondent, observing that the petitioner was not entitled to have the benefit provided u/s 80U, which is sought to be interfered with, in the present writ petition.

The learned Counsel for the petitioner, referring to the relevant rule position, submits that the prescription of the minimum extent of permanent disability at ''50 per cent'' was brought into effect only from 1-4-1992 on amending the relevant rules. It is stated that, earlier, there was no such stipulation and the petitioner was required to satisfy the mandate u/s 80U, as it stood then. For the purpose of convnience of reference, the relevant rule, i.e., Rule 11D, after the amendment brought into effect from 1-4-1992, is extracted below:

11D. Permanent physical disabilities for the purposes of deduction u/s 80U - For the purposes of Section 80U:

(i) permanent physical disability shall be regarded as permanent physical disability, 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.

(ii) mental retardation shall be regarded as a mental retardation if intelligence quotient is less than 50 on a test with a mean of 100 and a standard deviation of 15 such as the Wechsle scale.

(iii) blindness shall be regarded as a permanent physical disability, if it is incurable and falls in any one of the categories specified below, namely,:

** ** ***

Section 80U of the Act reads as under:

80U. Deduction in case of a person with disability.-(1) In computing the total income of an individual, being a resident who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of fifty thousand rupees:

Provided that where such individual is a person with severe disability, the provisions of this sub-section shall have effect as if for the words ''fifty thousand rupees'', the words ''seventy-five thousand rupees'' had been substituted.

(2) Every individual claiming a deduction under this section shall furnish a copy of the certificate issued by the medical authority in the form and manner, as may be prescribed, along with the return of income u/s 139, in respect of the assessment year for which the deduction is claimed:

Provided that where the condition of disability requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessment year, relating to any previous year beginning after the expiry of the previous year during which the aforesaid certificate of disability had expired, unless a new certificate is obtained from the medical authority in the form and manner, as may be prescribed, and a copy thereof is furnished along with the return of income u/s 139.

The learned Counsel for the petitioner, placing reliance on the ''proviso'' asserts that the case of the petitioner being squarely covered by the said proviso was never required to produce any further certificate showing permanent disability as more than 50 per cent, particularly since no other stipulation was there. The mistake happened only because of the fact that the petitioner, though was not required to produce any subsequent certificate and the certificate already produced by him with respect to the immediate previous year was very much liable to be acted upon, unfortunately he produced a fresh certificate, which was considered and analysed by the departmental authorities to arrive at a finding that, since the certificate produced by the petitioner did not show permanent disability of more than 50 per cent, the benefit of the deduction as provided u/s 80U would not be available to him.

The learned standing counsel appearing for the departmental authorities submits that, after amendment of the Rule with effect from 1-4-1992, it was mandatory for the petitioner to substantiate the fact that he was having more than 50 per cent disability. The learned Counsel submits that if the certificate already produced by the persons concerned even before 1-4-1992, stipulated that the permanent disability was of more than 50 per cent, the same could be acted upon and that it was not necessary for such persons to produce any fresh certificate. This Court finds it very difficult to accept the above proposition, particularly in view of the fact that such a situation is not discernible from the terminology used u/s 80U. The certificate to be produced by the persons concerned earlier, did not require to satisfy the percentage of disability in any manner. On the other hand, it is only stipulated that the disability ought to have been of such magnitude having the effect of ''reducing considerably'' the power of an individual for normal work or engagement, for enabling the person concerned to avail such a deduction. When the requirement of the statute was only to such extent, there was absolutely no necessity to show the extent or percentage of disability in the certificates issued earlier. If the certificate issued by the concerned authority showed the disability of the person concerned as having considerably affected the capacity of the person to do normal work, it was very much liable to be acted upon by the departmental authority for providing the benefit of deduction. Such instances are specified, even after amendment, by virtue of the proviso to the section, which has already been extracted above. No other interpretation is possible, for the plain reason that, it cannot be taken that the Law-making authorities were unaware of the provision as it existed earlier. That apart, the petitioner has also got a case that he was actually having the permanent disability of ''55 per cent'' so as to have come within the purview of amended requirement, as evident from Ext. P4(a). Certificate issued by the District Medical Board, Kollam, which however has been quite conveniently ignored by the departmental authorities.

In the above facts and circumstances, the impugned orders (Exts. P3 and P6) passed by the authorities are set aside. It is declared that the petitioner is entitled to get the benefit of deduction. Consequential orders shall be passed accordingly, as expeditiously as possible.

The Writ Petition is allowed. No cost.