Whether sec. 80 DD [2 ] [a] – explanatory circular Circular No. CO/CRM/PS/622/23 dated January 24, 2008 and its proviso, denying the benefit of the insurance to the handicapped persons to get annuity or lumpsum amount 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 – violates the fundamental right of equality of the handicapped person enshrined in Article 14 of the Constitution. ?


Hon’ble Mr. Justice Arjan Kumar Sikri

Public interest litigation – Sec.80 DD of Income Tax Act – “80DD. Deduction in respect of maintenance including medical treatment of a dependant who is a person with disability – Jeevan Aadhar Policy (Table 114) from the Life Insurance Corporation of India for the livelihood of their children. – The petitioner himself is a differently abled person as he is suffering from Cerebral Dysphagia – As per clause (b) of sub-section (1), if an assessee, being an individual or a HUF, has paid or deposited any amount under the scheme framed in this behalf by the LIC or any other insurer etc., such an assessee is entitled to deduction of a sum of Rs.75,000/- from his Gross Total Income in respect of the previous year. It is subject to the conditions which are specified in sub-section (2) of Section 80DD.

We are concerned with the condition mentioned in clause (a) of sub-section (2).- (2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely:— (a) the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made;- As per this condition, disabled dependant would get annuity or lumpsum payment in the event of death of the individual or the death of the member of the HUF, in whose name subscription to the scheme has been made. In order to give effect to the aforesaid special provision meant for the benefit of persons with disability, LIC has floated insurance policy named ‘Jeevan Aadhar (Table 114)’ for the benefit of the handicapped dependants. Accordingly, those assessees who get the Jeevan Aadhar policy for the benefit of handicapped dependants and pay or deposit the amount under the said policy become entitled to the deduction mentioned in Section 80DD of the Act. -The grievance of the petitioner pertains to Circular No. CO/CRM/PS/622/23 dated January 24, 2008 which is issued by the Income Tax Department. As per this Circular, no benefit can be paid to the dependant till the proposer/life assured survives. Relevant portion of this Circular is extracted below: “Representations were received for allowing annuity payments for the disabled dependant before death of parents/life assured after a certain age. But CBDT/Govt. Of India have refused to do so. Hence it is clarified that no benefit can be paid to dependant till the proposer/life assured survives.” It is, thus, clear that even when the entire subscription is paid under this policy meant for handicapped persons, this policy does not have maturity claim. The amount is payable to the dependant only on the demise of the proposer/life assured.- Submission of the petitioner is that by incorporating such a provision, the respondents are denying the benefit of the insurance to the handicapped persons to get annuity or lumpsum amount 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 –

Apex court hled that 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 any source of income. – In such cases, it may be difficult for such a parent/guardian to take care of the medical needs of his/her disabled child. Even when he/she has paid full premium, the handicapped person is not able to receive any annuity only because the parent/guardian of such handicapped person is still alive. -There may be many other such situations. However, it is for the Legislature to take care of these aspects and to provide suitable provision by making necessary amendments in Section 80DD of the Act – In fact, the Chief Commissioner for Persons with Disabilities has also felt that like other police holders, Jeevan Aadhar policy should also be allowed to mature after 55 years of age of the proposer and the annuity amount should be disbursed through the LLCs or National Trust – In the aforesaid circumstances, we dispose of this writ petition by urging upon respondent No.1 to have a relook into this provision by taking into consideration all the aspects, including those highlighted by the Court in this judgment, and explore the possibility of making suitable amendments.