1998 (7) TMI 75 - HC - Income Tax

Summary

Issues:
1. Entitlement to deduction under section 80U(1)(ii) of the Income-tax Act based on permanent physical disability.
2. Interpretation of the conditions for deduction under section 80U(1)(ii) of the Income-tax Act.
3. Application of Rule 11D in determining permanent physical disability.
4. Assessment of whether the permanent disability substantially reduces the capacity to engage in gainful employment or occupation.

Analysis:
Issue 1: The petitioner sought a writ of mandamus to challenge the rejection of relief under section 80U(1)(ii) of the Income-tax Act based on being a permanently physically disabled person. The petitioner, an employee at a bank, claimed the benefit due to almost total deafness. The authorities rejected the claim, leading to the writ petition.

Issue 2: The contention revolved around the interpretation of section 80U(1)(ii) which requires a permanent physical disability substantially reducing the capacity for gainful employment. The petitioner argued that the disability hindered promotions and better opportunities, justifying the deduction. The respondents countered, stating the petitioner's employment and earnings demonstrated capacity for gainful employment.

Issue 3: Rule 11D defines permanent physical disabilities for deduction under section 80U, including deafness above 71 decibels. The petitioner's medical certificate indicated hearing loss of 80 decibels, meeting the rule's criteria. However, the rule's application does not automatically entitle the petitioner to deduction.

Issue 4: The crux was whether the petitioner's permanent disability significantly reduced the capacity for gainful employment. The court emphasized that mere employment and earnings above Rs. 5,000 per month did not establish substantial reduction in capacity. The petitioner's inability to secure promotions solely due to deafness did not align with the Act's requirement of substantial reduction in capacity.

In conclusion, the court dismissed the writ petition, noting no error in the authorities' decisions. The judgment highlighted the necessity for the permanent disability to substantially impair the capacity for gainful employment to qualify for the deduction under section 80U(1)(ii) of the Income-tax Act.