COMMISSIONER OF INCOME-TAX VS BHAGWAT PRASAD P. PARIKH
2001 P T D 2193
[239 I T R 645]
[Gujarat High Court (India)]
Before R.Balia and A.R. Dave, JJ
COMMISSIONER OF INCOME-TAX
Versus
BHAGWAT PRASAD P. PARIKH
Income‑tax Reference No. 119 of 1983, decided on 03/11/1998.
Income‑tax‑‑‑
‑‑‑‑Special deduction‑‑‑Permanent physical disability‑‑‑Whether assessee suffers from permanent physical disability and whether disability results in substantially reducing his capacity to engage in gainful employment or occupation‑‑‑Are questions of fact‑‑‑Quantum of income earned by physically disabled not sole criterion for disallowing claim for deduction ‑‑‑Assessee suffering from coronary heart disease‑‑‑Tribunal after evaluating expert medical report about nature for disease and effect on physical capacity of person suffering from it finding that capacity for work of person with such heart disease would be substantially reduced, resulting in substantially reducing his capacity for earning income‑‑‑Tribunal holding assessee entitled to deduction‑‑‑Finding of Tribunal is finding of fact‑‑‑No question of law arises for reference‑‑‑Indian Income Tax Act, 1961, S.80U.
The assessee, an Advocate, claimed deduction under section 80U of the Income Tax Act, 1961, on the ground that he was suffering from coronary heart disease which amounted to permanent disability and had substantially affected his capacity to engage himself in gainful employment. The assessee also produced a medical certificate as required by the proviso to section 80U. The claim of the assessee was allowed by the Income‑tax Officer for the assessment years 1974‑75 to 1976‑77 but was disallowed for the assessment year 1977‑78, on the ground that the disease was not in itself a permanent physical disability which might bring about a substantial reduction in his capacity to be engaged in gainful employment or occupation. The Appellate Assistant Commissioner affirmed the order of the Income‑tax Officer on the grounds that the disease/disability of the assessee was not mentioned in the circular issued by the C.B.D.T. for the application of the said section and that the assessee's heart ailment had in no way reduced his income and on the contrary had gradually gone up implying thereby that the assessee's capacity to engage in gainful employment or occupation had in no way been reduced by the disease. On further appeal, the Tribunal found that the word used in section 80U did not mean everlasting but meant "expected to last indefinitely , that the requirement of producing a medical certificate was necessary but not conclusive, that the capacity for work of a person with such a heart disease would be substantially reduced and that, therefore, the assessee was entitled to the relief under section 80U. On a reference:
Held, (i) that the question whether the assessee suffered from permanent physical disability and whether the disability is such which had resulted in substantially reducing the capacity of such assessee to engage in gainful employment or occupation are questions of fact and do not give rise to a question of law unless such findings of fact are shown to be perverse or are vitiated because the same are founded on irrelevant considerations or partly relevant and partly irrelevant considerations or have been arrived at by ignoring relevant material on record or are based on no material. The findings had been arrived at by the Tribunal by appreciation of evidence and no question of law arose for reference.
(ii) That the fact that a person has a substantial income by itself cannot be the criteria for determining whether the disease or the disability from which the person is suffering has resulted in reducing his capacity for gainful employment. The substantial reduction in capacity to engage in gainful employment can have relevance to the extent it has affected the potential capacity of a disabled person which otherwise he could 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.
Sardar Harpreet Singh v. CIT (1991) 187 ITR 679 (All.) ref.
Manish R. Bhatt for the Commissioner.
Ajay R. Mehta for the Assessee.
JUDGMENT
At the instance of the Commissioner of Income‑tax., the Income‑tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad, has referred the following question of law said to be arising out of its order, dated February 18, 1982, in I.T.A. No.248/Ahd. of 1981, for the assessment year 1977‑78:
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law coming to the conclusion that the assessee was entitled to relief under section 80U of the Act?"
The assessee is an Advocate and had claimed deduction under section 80U of the Income Tax Act, 1961, on the ground that he is suffering from coronary heart disease which amounts to permanent disability and has substantially affected his capacity to engage himself gainfully. To that effect a certificate from registered medical practitioner that the assessee is suffering from permanent physical disability was also produced as required under the proviso to section 80U as it stood at the relevant point of time. For the assessment years 1974‑75 to 1976‑77, the claim of the assessee was allowed by the Income‑tax Officer. Later on though assessments were sought to be reopened under section 147(b) but the same were cancelled as the reopening was held to be without jurisdiction and illegal. For the assessment year in question, the Income‑tax Officer rejected the assessee's claim on the ground that the disease was not in itself a permanent physical disability which may bring about a substantial reduction in the capacity to be engaged in gainful employment or occupation. The Appellate Assistant Commissioner confirmed the Income‑tax Officer's, g, on the ground that the disease/disability of the assessee was not mentioned in the circular issued by the Central Board of Direct Taxes for the application of the said section 80U. He also found that the assessee's heart ailment had in no way reduced his income and on the contrary had gradually gone up implying thereby that the assessee's capacity to engage in. gainful employment or occupation had in no way been reduced by his disease. On further appeal the Tribunal found that the word used in section 80U did not mean everlasting but meant "expected to last indefinitely". It also observed that under the section, though requirement of producing a medical certificate is necessary but it is not conclusive of the fact but deserves considerable weight. Giving the expression permanent physical disability its natural meaning, the Tribunal held that on evidence in the case the assessee was entitled to the relief claimed by him. The Tribunal also found that on the question of evidence, the scales are almost evenly balanced, that is, the weight and contents of the medical evidence against fact of decreased income. However, on totality of circumstances, it concluded that the capacity for work of a person with such a heart disease would be substantially reduced. On these findings, the assessee was held entitled to relief under section 80U.
In the first instance it has been urged by learned counsel for the Revenue that a man suffering from coronary heart disease cannot be considered to be suffering from permanent physical disability in view of the circulars of the Central Board of Direct Taxes, referred to by the learned Appellate Assistant Commissioner in his order, which is of September 20, 1979. Though learned counsel candidly stated that the rules specifying permanent physical disability envisaged under section 80U had been framed for the first by themselves govern the interpretation of year in question. Secondly, learned counsel to suggest that the effect of was inflicted resulted in reducinga faithful employment or occupation vitiated and cannot be considered as binding.
Mr. Thakore, learned counsel appearing for the assessee, urged that whether coronary heart disease was such as to result in permanent physical disability and whether such disability has resulted in reducing the assessee's capacity to engage in gainful employment or occupation substantially are both questions of fact, the findings which have been arrived at by the Tribunal on appreciation of evidence are not liable to be interfered with and the order of the Tribunal does not give rise to any question of law.
In the facts and circumstances of the case, we agree with the contention raised by learned counsel for the assessee that the questions whether the assessee suffers from permanent physical disability and whether the disability is such which has resulted in substantially reducing the capacity of such assessee to engage in gainful employment or occupation are questions of fact and do not give rise to a question of law unless such finding of facts are shown to be perverse or are vitiated because the same are founded on irrelevant considerations or partly relevant and partly irrelevant consideration or have been arrived at by ignoring relevant material on record or are based on no material. Unless for any of such reason which takes away the binding nature of the fact arrived at by the final fact‑finding Tribunal such finding does not give rise to question of law. The Tribunal after evaluating the material before it, namely, the expert medical reports about the nature of disease and its effect on the physical capacity of the person suffering from it and growth in annual income returned by the assessee has come to the conclusion that seemingly the balance of evidence is tilted in favour of the assessee and held that the assessee was suffering from permanent physical disability and that such disability has resulted in substantially reducing the capacity of his earning. It is not the case that any material which was on record has not been taken into account by the Tribunal. In such circumstances, in our opinion, these findings have been arrived at by appreciation of evidence and do not give rise to any question of law, and are binding on this Court. If that be so, the answer to the question referred to us' must be in the affirmative, in favour of the assessee.
Learned counsel for the Revenue urged that increase in income being an admitted fact and no evidence has been led contrary to it, the finding that disability of the assessee has resulted in reducing substantially his capacity to engage gainfully must be considered to be perverse. We are unable to accept this contention either. The question is not of measuring the loss of efficiency of the disabled person for the purpose of quantifying damages of compensation to be awarded to, him. The question has to be considered in the context that a person who has a taxable income and not only has a taxable income but income above a minimum taxable level, is entitled to concession granted under the statutory provision to permanently physically disabled person. Therefore, the fact that the person has A substantial income by itself cannot be the criteria 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 the provision with which we are concerned, 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 otherwise he could 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. There is no limit prescribed in the statute that a person having income beyond a particular level is not entitled to the benefit of section 80U. Without such inhibition the quantum of income earned by the assessee who is physically disabled permanently cannot by itself be a criterion for disallowing the claim for deduction under section 80U, though it may be a relevant consideration alongwith other factors to be taken into account.
In this connection, we may refer to a decision of the Allahabad High Court in Sardar Harpreet Singh v. CIT (1991) 187 ITR 679. That was a case where the assessee who had suffered permanent physical disability affecting his limbs was employed in a company and he was having regular remuneration as other employees of his class. For that reason it was found by the Tribunal that though he is suffering from some physical disability, it cannot be said that it has resulted iii substantially reducing his capacity to gainful. employment. The Court, disagreeing with the conclusion reached by the Tribunal, opined (page 683):
"Whill considering the question of allowing deduction under section 80U of the Act, what is to be looked into by the authorities is as to whether the assessee suffers from permanent physical disability which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation. It is not a condition precedent for allowing the deduction under this provision that the assessee should be unemployed or should not be earning anything. Merely because the assessee is earning income from some business, the deduction under section 80U of the Act cannot be disallowed for, had he not suffered from permanent physical disability, he could have earned more."
That is the approach which was approved by the Court with which we respectfully agree. We may make it clear that it does not mean that earning is not a relevant consideration. It certainly is relevant consideration. But this cannot be the sole consideration for deciding the issue.
As the Tribunal after taking into consideration all the facts has reached a finding about reduction in capacity in our opinion, it is a question of appreciating and evaluating evidence and does not give rise to a question of law.
As a result of the aforesaid discussion, the question referred to us is answered in the affirmative, in favour of the assessee.
There shall be no order as to costs.
M.B.A./257/FCReference answered.