SARDAR HARPREET SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Income-tax Appellate Tribunal, Delhi Bench "B", New Delhi, under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), has referred the following two questions to this court for its opinion ;

(2.) WHETHER, on the facts and in the circumstances of the case, the learned Tribunal was legally correct in holding that the deduction under Section 80U of the Act allowed by the Income-tax Officer was rightly withdrawn by the Appellate Assistant Commissioner of Income-tax ?"

(3.) UNDER Section 80U of the Act, an assessee is entitled to deduction if he is totally blind or suffers from a permanent physical disability which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation. The assessee, in this connection, has produced the medical certificate before the lower authorities which goes to show that he suffers from a permanent physical disability which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation. The Income-tax Officer allowed the deduction under Section 80U of the Act but the Appellate Assistant Commissioner and the Appellate Tribunal have disallowed the deduction on the ground that he is engaged in the business of the company and earning money. The approach, both of the Appellate Assistant Commissioner and the Appellate Tribunal, is erroneous. While 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 a 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 a permanent physical disability, he could have earned more. In our opinion, the Appellate Tribunal was not justified in disallowing the deduction under Section 80U of the Act.