Deduction under sections 80U and 80DD of the Income-tax Act, 1961 - Clarification regarding - Income Tax - 653/1993

Deduction under sections 80U and 80DD of the Income-tax Act, 1961 - Clarification regarding Circular No. 653 Dated 15/6/1993 To All Chief Commissioners of Income-tax/ All Directors-General of Income-tax. Sir, Section 80U as it existed till the assessment year 1989-90 and earlier years provided for a deduction in the case of resident individual assessees suffering from a permanent physical disability (including total blindness). 2. By an amendment made by the Finance Act of 1989, with effect from the assessment year 1990-91, the deduction was made also applicable to assessees suffering from mental retardation to the extent specified in the rules made in this behalf by the Board. Though this amendment came into force with effect from 1st April, 1990, the rule referred to therein, viz., rule 11D(ii), defining "mental retardation", has been notified only on 27th January, 1992, though with retrospective effect from 1st April, 1990. Thus, it is possible that, in the absence of relevant rules at the time, the returns for the assessment years 1990-91 and 1991-92 were due, certain eligible assessees could not have claimed the deduction under section 80U(1)(iii). 3. A similar issue has arisen in respect of section 80DD, which was inserted by the Finance Act, 1990, with effect from 1991-92. This section provides for a deduction in respect of medical treatment, training and rehabilitation of handicapped dependants of assessees. The deduction is applicable if the dependant is suffering from a permanent physical disability including blindness or is subject to mental retardation, being a permanent physical disability or mental retardation specified in the rules made in this behalf by the Central Board of Direct Taxes. Though this section became effective from the assessment year 1991-92, the rule specified therein, viz., rule 11A was introduced only on 27th January, 1992, though with retrospective effect from 1st April, 1991. It is possible, therefore, that certain eligible assessees may not have claimed the deduction due to absence of rules at the relevant time when the return for the assessment year 1991-92 was due. 4. It is clarified that such of those assessees, in whose cases the assessments for these assessment years have already been made, or intimations under section 143(1)(a) have already been issued, are free to file rectification applications under section 154 or revision petitions under section 264 enclosing proper medical certificates and such petitions shall be admitted by the concerned authorities, if necessary by condoning the delay, and shall be disposed of on merits. Where any refund is due on this account the same shall be granted. 5. In the cases of those assessees in whose cases the assessments are still pending or no intimation under section 143(1)(a) has so far been served, they may file revised returns for the limited purposes of claiming deduction under either section 80U(1)(iii) or section 80DD and, for this purpose, the Board, in exercise of the powers vested in it under section 119(2)(a) of the Income-tax Act, hereby extends the time limit mentioned under section 139(5), till 31st December, 1993, for filing such revised returns for the aforesaid assessment years. The Assessing Officers are authorised to deal with such returns on merits according to law and grant refunds wherever due. 6. If there are any other cases of hardship, not covered by this circular, the same may be brought to the notice of the Board for appropriate action. 7. The contents of this circular may please be brought to the notice of all concerned authorities in your jurisdiction. Yours faithfully, (Sd.) G. Muthuramakrishnan, Director to the Government of India.