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TMI Blog2019 (1) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... y, after the death of the parent/guardian. The presumption is that during his/her lifetime, the parent/guardian would take care of his/her handicapped child. The prayer is that Section 80DD of the Act be suitably amended. This Court cannot give a direction to the Parliament to amend or make a statutory provision in a specified manner. The Court can only determine, in exercise of its power of judicial review, as to whether such a provision passes the muster of the Constitutional Scheme. Though, there is no specific prayer in this behalf, but in the body of writ petition, argument of discrimination is raised. Here, we find that the respondents have been able to successfully demonstrate that the main provision is based on reasonable classification, which as a valid rational behind it and there is a specific objective sought to be achieved thereby. The petitioner may be justified in pointing out that there could be harsh cases where handicapped persons may need the payment on annuity or lumpsum basis even during the lifetime of their parents/guardians. Where guardian has become very old but is still alive, though he is not able to earn any longer or he may be a person who was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made. Though it is a long provision, for our purposes it would be suffice to reproduce sub-sections (1), (2) and (3) thereof, which are as under: 80DD. Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability.- (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident in India, has, during the previous year,- (a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of a sum of seventy-five thousand rupees from his gross total income in respect of the previous year: Provided that where such dependant is a person with severe disability, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icy become entitled to the deduction mentioned in Section 80DD of the Act. Synopsis of the said policy introduced by the LIC gives a glimpse of the salient features of this plan and is, thus, reproduced below: A) Synopsis of Plan 1) Age at entry (life assured) Minimum 22 years, Maximum 65 years. (handicapped dependant 1 year) The age of the life assured and handicapped dependant are required to be admitted on the basis of standard age proof. 2) Maximum premium ceasing age 75 years. 3) Premium paying term 10, 15, 20, 25, 30 35 years. 4) Policy term this is whole life plan. 5) Sum assured Minimum 50000, Maximum no limit. 6) Mode of payment Yearly, Half-Yearly, Quarterly, Monthly, SSS, Single also. 7) Rebate on mode of payment Yearly 3% of tabular premium, Half-yearly 1.5% of tabular premium, Quarterly/ Monthly/SSS no rebate. 8) Rebate on high sum assured - 25,000 to 49,999 Re.1/- per 1000 sum assured 50,000 and above ₹ 2/- per 1000 sum assured. 9) All extra mortality rate class are allowed. 10) All female categories i.e. I, II, III are alloewd. 11) Only NMS is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount during the lifetime of the parent/guardian of such a handicapped person, whereas the beneficiaries of other life insurance policy are getting annuity during the lifetime of the person who has taken insurance policy. This, according to the petitioner, violates the fundamental right of equality of the handicapped person enshrined in Article 14 of the Constitution. 7) The petitioner states that he had lodged a complaint before the Insurance Regulatory and Development Authority of India (IRDA) on August 06, 2014. However, the said Authority in its reply expressed its inability to provide any help having regard to the afore-mentioned Circular dated January 24, 2008 of the CBDT. The petitioner even approached the Court of the Chief Commissioner for Persons with Disabilities raising the aforesaid grievance. The Chief Commissioner heard the matter on various dates and passed the order advising the CBDT to once again examine the matter in consultation with the Department of Empowerment of Persons with Disabilities, Ministry of Social Justice and Empowerment, as well as National Trust. Relevant portion thereof reads as under: 11. During the hearing on 10.03.2015, it was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the policy holders till the dependant is alive. 15. Both the complainants strongly felt that like other policy holders, Jeevan Aadhar Policy should also be allowed to mature after 55 years of age of proposer and the annuity amount should be disbursed through the LICs of National Trust. 16. In the light of the demand of the complainants, CBDT is advised to once again examine the matter in consultation with Department of Empowerment of Persons with Disabilities, Ministry of Social Justice Empowerment and National Trust. 8) The Chief Commissioner had even sent reminder thereof to the CBDT to look into the matter. However, nothing moved at the level of the CBDT. In fact, the petitioner thereafter lodged his grievance with the Prime Minister s Office through Centralised Public Grievance Redressal and Monitoring System Portal on October 15, 2015. As he did not receive any response, it provoked the petitioner to file the instant writ petition with the following prayers: (a) Issue a writ of Mandamus or any other appropriate writ, order of direction to Respondents No 1 to amend Section 80DD of the Income Tax Act to allow for the payment of annuity or lump sum amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependant relative of an individual or member of HUF. The substitution was done to provide for composite Section in respect of deduction for expenditure on medical treatment, rehabilitation etc. and for payment made under a scheme of LIC or any other insurer for the dependant disabled person. Submission is that in effect Section 80DD amalgamates the provisions of the two sections, namely, 80DD and 80DDA. Thus, both erstwhile Section 80DDA and present Section 80DD provide that the annuity or lump sum amount for the benefit of the dependant who is a person with disability will be disbursed only after the death of the subscriber. Jeevan Aadhar scheme of LIC has been designed keeping in mind the tax benefits under Section 80DDA/80DD of the Act. 11) It is also submitted by respondent No.1/Union of India that the aforesaid provision was specifically provided for in the Act keeping in view the fact that the guardians of children with disability are always faced with the grim reality about the need for maintenance of the disabled after the death of the primary care giver, i.e. the parent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto account. In order to allow a choice to the parent or the guardian to spend either on the medical treatment of or for the future need of the handicapped dependant, as the case may be, the Bill seeks to provide a new section 80DD. With this provision, the parent or the guardian could claim a deduction upto ₹ 40,000/- for the medical treatment and for future needs of the handicapped dependant in the manner most suited to his needs. The existing sections 80DD and 80DDA would get consequentially merged with increase in overall limit of deduction from ₹ 35,000 to ₹ 40,000/-. 13) Number of judgments were cited by the learned Additional Solicitor General appearing for the Union of India to placate the argument of discrimination based on Article 14 of the Constitution. Insofar as respondent No.2/LIC is concerned, its simple answer is that the clause in the policy is as per the prescribed norm approved by the CBDT. Of course, LIC has also supported the reasons given by Union of India behind the aforesaid Circular. 14) We have considered the respective submissions. 15) At the outset, it may be observed that Section 80DD of the Act is a provision made by the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the policy is to be released only after the death of the person assured. This is the legislative mandate. There is no challenge to this provision. The prayer is that Section 80DD of the Act be suitably amended. This Court cannot give a direction to the Parliament to amend or make a statutory provision in a specified manner. The Court can only determine, in exercise of its power of judicial review, as to whether such a provision passes the muster of the Constitutional Scheme. Though, there is no specific prayer in this behalf, but in the body of writ petition, argument of discrimination is raised. Here, we find that the respondents have been able to successfully demonstrate that the main provision is based on reasonable classification, which as a valid rational behind it and there is a specific objective sought to be achieved thereby. 19) In State of U.P. and Another v. Kamla Palace, (2000) 1 SCC 557, this Court, while considering a fiscal statute in relation to Article 14 of the Constitution, has stated as under: 11. Article 14 does not prohibit reasonable classification of persons, objects and transactions by the legislature for the purpose of attaining specific ends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther persons. The test of permissible classification is twofold: (i) that the classification must be founded on intelligible differentia which distinguishes persons grouped together from others who are left out of the group, and (ii) that differentia must have a rational connection to the object sought to be achieved. Article 14 does not insist upon classification, which is scientifically perfect or logically complete. A classification would be justified unless it is patently arbitrary. If there is equality and uniformity in each group, the law will not become discriminatory, though due to some fortuitous circumstance arising out of peculiar situation some included in a class get an advantage over others so long as they are not singled out for special treatment... 22) The petitioner may be justified in pointing out that there could be harsh cases where handicapped persons may need the payment on annuity or lumpsum basis even during the lifetime of their parents/guardians. For example, where guardian has become very old but is still alive, though he is not able to earn any longer or he may be a person who was in service and has retired from the said service and is not having a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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