1983 (2) TMI 114 - AT - Income Tax

Summary

Issues:
- Claim of deduction under section 80U for an individual with permanent physical disability.
- Interpretation of the provisions of section 80U by the assessing authorities.
- Applicability of a circular issued by the Board regarding deductions for specific disabilities.

Analysis:

The judgment pertains to an appeal by an individual assessee for the assessment year 1978-79, concerning the disallowance of a claim under section 80U of the Income-tax Act, 1961. The assessee, who derives income from salary, had declared an income of Rs. 9,490 and claimed a deduction of Rs. 5,000 under section 80U, supported by a certificate from a registered doctor indicating a permanent physical disability. The Income Tax Officer (ITO) and the Appellate Authority Commissioner (AAC) both disallowed the claim, asserting that the disability did not substantially reduce the assessee's capacity for gainful employment.

Before the Tribunal, the assessee contended that the disability significantly reduced his capacity for employment, supported by a medical certificate and a circular from the Board specifying conditions for claiming deductions under section 80U. The Tribunal noted that the assessee suffered from bilateral post-polio residual paralysis of the lower limb, resulting in a 45% disability, qualifying as orthopaedically handicapped for income tax deductions. The Tribunal highlighted that the genuineness of the medical certificate was not disputed by the authorities and that the circular from the Board supported the assessee's claim.

The Tribunal further explained the provisions of section 80U, which allow a deduction of Rs. 5,000 for individuals with permanent physical disabilities substantially reducing their employment capacity. The assessee had fulfilled the requirements by submitting the necessary medical certificate. The Tribunal emphasized that the assessee's case fell within the scope of the circular issued by the Board, which recognized bilateral paralysis of the lower limb as a qualifying disability under section 80U.

Consequently, the Tribunal held that the assessee was entitled to claim the deduction under section 80U, overturning the decisions of the lower authorities. The Income Tax Officer was directed to allow the relief to the assessee as claimed. The appeal was allowed in favor of the assessee, affirming the eligibility for the deduction under section 80U based on the permanent physical disability and the supporting medical documentation.