By TIOL News Service

NEW DELHI, JAN 03, 2018: THE issue before the Apex Court was that whether the Supreme Court is vested with the power to direct the Parliament to amend a law or create some legal provision, to a specified effect. NO is the answer. The Larger Bench also held that the mandate of amending certain beneficial provisions under the I-T Act vests with the Legislature only & the Apex Court can only persuade the legislature to extend the benefit embedded in such provisions, to a certain class of persons.

Facts of the case

The petitioner is a differently-abled person, who filed the present Public Interest Litigation. He represented the interests of handicapped children whose parents availed the Jeevan Aadhar Policy from the LIC, for the livelihood of the children. He drew attention to the provision of the policy, stating that those assessees who obtain the policy for the benefit of handicapped dependents and deposit some amount under the policy, are entitled to deduction of Rs 75000/- from Gross Total Income, u/s 80DD of the I-T Act, 1961. The petitioner was aggrieved by the provisions of CBDT Circular No CO/CRM/PS/622/23 dated January 24, 2008, by virtue of which no benefit can be paid to a dependant till the proposer/life assured survives. The effect of this is that even if the entire subscription is paid, the policy does not have maturity claim. Thus the amount is payable to the dependant only upon the demise of the proposer/life assured. The petitioner further claimed that the benefit of insurance was being denied to the handicapped persons as they received no annuity or lumpsum amount, during the lifetime of the parent or guardian of the handicapped person. He also drew a parallel with beneficiaries under other life insurance policies, who were getting annuity during the lifetime of the person who availed the insurance policy. Such an anomaly, he claimed, ran contrary to the Fundamental Right of equality as per Article 14 of the Constitution of India. The petitioner claimed that his representations before the IRDA & the CBDT bore no fruit. Hence requisite amendments to the provisions of Section 80DD have been sought for in this petition.

In writ, the Apex Court held that,

++ benefit of deduction from income for the purposes of tax is admissible subject to the conditions mentioned in Section 80DD of the Act. The Legislature has provided the condition that amount/annuity 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, it is found 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. 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. Hence the respondent No.1 is directed to relook into this provision by taking into consideration all the aspects.

(See 2019-TIOL-03-SC-IT-LB)