Section 80U

Blind/physically handicapped persons

Assessee need not be unemployed or not earning anything - It is not a condition precedent for allowing deduction under section 80U that the assessee should be unemployed or should not be earning anything. Merely because the assessee is earning  from some business, deduction cannot be disallowed  - Sardar Harpreet Singh v. CIT [1991] 187 ITR 679 (All.).

Quantum of income cannot be the sole criterion for disallowing claim - Where the Tribunal had, after evaluating the material before it, held that the assessee, who was suffering from coronary heart disease, was suffering a permanent physical disability which had resulted in substantially reducing the capacity of his earning, and was hence entitled to deduction under section 80U, such a finding was one of fact which was binding on the court, and could not be construed as perverse on the ground that the assessee’s income had increased. The fact that the person has a substantial income by itself cannot be the criterion for determining whether the disease or the disability with which the person is suffering has resulted in reducing his capacity to gainful employment. In such circumstances, in the context of section 80U, the substantial reduction in capacity to engage in gainful employment can have only relevance to its relation to the extent it has affected the potential capacity of a disabled person which he could otherwise have exploited to his advantage. It is not a case of quantifying or measuring the effect of disability on the actual earning. But its effect on what he could have earned without disability, or what opportunity he could have availed of in the absence of such disability. Earning is no doubt a relevant consideration but it cannot be the sole consideration for deciding the issue - CIT v. Bhagwat Prasad P. Parikh [1999] 239 ITR 645 (Guj.).

Object of section 80U is to provide relief to the assessee and that relief cannot be withheld on the ground that the person who seeks the relief has an income - V.M. Nithiyanam v. CIT [1999] 102 Taxman 531 (Mad.).

Earning of income cannot be a ground for denying deduction - The fact that a person has a handicap which, even according to the doctor is a permanent one and impairs the efficiency of the person, is sufficient to infer that such a person suffers a disadvantage and his ability to perform is deficient when com­pared to a person who does not have a handicap. It is not neces­sary for the purpose of section 80-U that a handicapped person must be incapable of earning. If that was the intention, it would be absolutely futile to provide for a concession in income-tax to a person who has no income. Earning of income, therefore, cannot be put against the handicapped person to deny him the relief - CIT v. K. Santhanakrishnan [2000] 241 ITR 582 (Mad.).

Person suffering from blindness of one eye is eligible - Where the record clearly demonstrated that the petitioner suf­fered from a permanent physical disability as regards right eye (i.e., blindness), the petitioner was entitled to claim deduction under section 80U - Madhusudan v. ITO [1995] 213 ITR 840 (MP).

Hypertension is not covered - Reference to physical disability in section 80U is to such disabilities as blindness, loss of hear­ing, sensation or movement. Stress and strain is inevitable when one works under pressure, as almost every one in the present day circumstances. Hypertension is not an uncommon ailment as a result of such stress. While it may reduce the capacity of the person to withstand stress, it cannot be regarded as a permanent physical disability. A certificate given by a doctor to the effect that the assessee was suffering from essential hyperten­sion for the past ten years, that the disease was only controlla­ble and not completely curable, and that this disease substan­tially reduced his working capacity, would not satisfy the re­quirements of section 80U - CIT v. E.V. Subramanian [2000] 243 ITR 281 (Mad.).

Belated claim cannot be rejected - Where claim for deduction was made by a chartered accountant-assessee after coming to know of a clarification that   deduction was admissible for partial physical disability also, the Commissioner would not be justified in rejecting the claim on the sole ground that, as a chartered accountant, assessee could not be heard to say that he was not aware of the legal position - N.C. Srinivasan v. ITO [1995] 211 ITR 236 (Mad.).

Once the disability falls under the items specified in the rules, further enquiry about earning capacity is not called for - Section 80U should be construed liberally, and persons handicapped must be entitled to the benefit of deduction provided for in that section if the handicap is one which is specified in the rules. Once the disability clearly fell under Rule 11D, any further enquiry as to whether the earning capacity has been adversely affected by reason of the disability was unnecessary as that factor had been taken note of by the Board when it specified the disability as one which qualified as a disability under section 80U. It has to be presumed that the person who suffered from a specified disability would also suffer a reduction in his earning capacity by reason of that disability - J.K. Abdul Jabbar v. CIT [1998] 101 Taxman 21 (Mad.).

Mere existence of income is not a relevant test to deny the deduction - For deciding the issue as to whether relief can be granted under section 80U, the test that if a man has an income despite his disability that by itself would be sufficient to show that the disability has not come in the way of his earning an income, is not a relevant test. The object of section 80U is to provide relief to the assessee and that relief cannot be withheld on the ground that the person who seeks the relief has an income. The physical disability not having been disputed, it can only be assumed that it had an impact on the extent of income the asses­see could earn. When a relief is sought under section 80U, in a case where disability is proved, there is a duty cast upon the authority to appreciate the nature and extent of the disability and the impact of the disability on the income-earning capacity of the individual, having regard to the source of income of the individual and other relevant factors - V.M. Nithiyanam v. CIT [1999] 102 Taxman 531 (Mad.).

Assessee must not only be suffering from one of the prescribed disabilities but also satisfy the second requirement of inability to get engaged in gainful employment - To get deduction under section 80U, the assessee must satisfy two conditions, (i) that he is suffering from a physical disability mentioned in Rule 11D, and (ii) that such permanent disability has the effect of reduc­ing substantially his capacity to engage in a gainful employment or occupation, as laid down in section 80U(1)(ii). The rule only explains the permanent disability, and it cannot override the section. When the Legislature has used the words ‘reducing sub­stantially his capacity to engage in a gainful employment or occupation’, this would mean that the person who is suffering from permanent disability must be in a position that he is unable to get himself engaged in a gainful employment or occupation. Inability to obtain promotions and increments cannot be said to fall within this clause. Thus, where the petitioner was employed in a foreign bank and was earning not less than Rs. 5,000 p.m., the finding of the department that, the petitioner did not satis­fy the second requirement could not be said to be erroneous - K.S. Srinivasan v. CIT [1999] 102 Taxman 342 (Mad.).

u  Where the assessee had, admittedly, been gainfully employed as a senior assistant in a bank, and had claimed the deduction solely on the strength of a certificate issued by a medical prac­titioner mentioning the deformity over the right wrist and fin­gers, the deduction was not admissible. It was evident that the said deformity did not have the effect of reducing substantially his capacity to engage in a gainful employment. Mere existence of the deformity would not suffice - D. Syed Amanullah v. CIT [2000] 246 ITR 698 (Mad.).

Certificate from honorary surgeon is also valid, and can be pro­duced at any stage; its genuineness cannot be questioned - Sec­tion 80U requires that the certificate should be given by a physi­cian, a surgeon, an oculist or a psychiatrist working in a Government hospital. There is no requirement that the doctor certifying permanent physical disability should be employed as a civil surgeon in a Government on a regular salary or on regular basis. A surgeon rendering honorary service at a Government hospital is as much a surgeon working on regular basis in a Government hospital under regular rules of employment. The provi­sion has not empowered the Assessing Officer with authority to adjudicate upon the correctness of the certificate. Where the Assessing Officer had allowed the deduction in subsequent years on the basis of a certificate issued by an honorary surgeon in the earlier year, he cannot deny deduction in that earlier year on the ground that the certificate did not satisfy the test of being issued by a doctor working in a Government hospital. Law has not prescribed that the said certificate should be obtained within a particular time, and hence it can be produced at any stage of the proceedings - Snehlata Chandrakant Chalishazar v. Thanvi [2000] 108 Taxman 171 (Guj.).