Supreme Court of India
RAVI AGRAWALversusUNION OF INDIA & ANOTHER
- Citation
- 2024 INSC 648
- Decided
- 20 August 2024
- Disposal
- Disposed off
Holding
The amendment to section 80DD cannot be given retrospective effect as it would defeat the object of the provision and the contractual rights of disabled beneficiaries.
Summary
Ravi Agrawal filed a writ petition seeking retrospective application of the Finance Act, 2022 amendment to section 80DD of the Income Tax Act, which allows a subscriber to discontinue payments to a Jeevan Adhar scheme upon attaining the age of 60 and to use the accumulated benefit. He argued that the amendment should apply to policies taken before 2014 so that many subscribers and disabled beneficiaries could benefit. The Court examined the object of section 80DD, which is to provide a benefit to a disabled dependent only after the subscriber’s death, and held that a retrospective change would undermine the contractual terms of the insurance policy and the interests of disabled persons. The Court also noted that the amendment was already given prospective effect following an earlier Supreme Court order and that retrospective operation would violate the principle of legal certainty and Article 14. Consequently, the petition was dismissed and the amendment was not given retrospective effect.
Issues considered
- Whether the amendment to section 80DD of the Income Tax Act, 1961 can be given retrospective effect.
- Whether retrospective operation of the amendment would violate the rights of disabled persons under Article 14 of the Constitution.
- Whether the object of the Jeevan Adhar insurance contract permits alteration of its terms retrospectively.
Legislation cited
Subjects
Amendment to s.80DD of the Income Tax ActRetrospective operation of the amendmentJeevan Adhar PolicyBenefit of disabled personsCaregiver or subscriber of a policy for a disabled family memberInsurance contract
Judgment
[2024] 8 S.C.R. 788 : 2024 INSC 648
Ravi Agrawal
v.
Union of India & Another
Writ Petition (Civil) No. 706 of 2020
20 August 2024
[B.V. Nagarathna and Nongmeikapam Kotiswar Singh, JJ.]
Issue for Consideration
Matter pertains to the issue that if the amendment to s.80DD of
the Income Tax Act, 1961 can be given retrospective effect.
Headnotes†
Income Tax Act, 1961 – s.80DD (as amended) – Deduction
in respect of maintenance including medical treatment
of a dependent who is a person with disability – As per
amendment to s.80DD, on attaining the age of 60 years or
more by an individual subscriber or a member of an HUF,
the payment or deposit to the scheme envisaged u/s.80DD
can be discontinued and the monetary benefit which would
have accumulated can be made use of – Amendment, if can
be given retrospective effect:
Held: Amendment to s.80DD cannot be given retrospective effect –
Plea that the amendment to s.80DD be applied retrospectively
to policies which were taken prior to 2014 so that the benefit of
the amendment is given to those subscribers also, cannot be
accepted – Plea for retrospective operation of the amendment not
in the interest of the disabled persons – Whole object of Jeevan
Adhar Policy is to benefit disabled persons by making provision
by the subscriber post his demise – Concern and apprehension of
a caregiver or subscriber of a policy for a disabled family member
or other person for whose benefit the policy is taken after the
demise of the caregiver is of utmost significance – It is only with
that object that the caregiver or a subscriber would take such a
policy so that he would not leave a disabled person in the lurch
on his demise – Insurance contract is in a sense, a commercial
contract, having certain terms and conditions and the sub-stratum
of the contract cannot be removed by giving a retrospective
operation to the amendment – Benefit u/s.80DD would have been
availed by the subscribers at the time when they have subscribed
to the policy. [Paras 7, 8]
[2024] 8 S.C.R. 789
Ravi Agrawal v. Union of India & Another
Case Law Cited
Ravi Agrawal v. Union of India [2019] 1 SCR 8 – referred to.
List of Acts
Income Tax Act, 1961; Finance Act, 2022; Persons with Disabilities
(Equal Opportunities, Protection of Rights and Full Participation)
Act, 1995; Rights of Persons with Disabilities Act, 2016; Life
Insurance Corporation Act, 1956.
List of Keywords
Amendment to s.80DD of the Income Tax Act; Retrospective
operation of the amendment; Jeevan Adhar Policy; Benefit of
disabled persons; Caregiver or subscriber of a policy for a disabled
family member; Insurance contract.
Case Arising From
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 706 of 2020
(Under Article 32 of The Constitution of India)
Appearances for Parties
Partha Sil, Amicus Curiae.
Tavish Bhushan Prasad, Ms. Sayani Bhattacharya, Abhiraj Chowdhary,
Anirudh Gupta, Chirag Joshi, Advs. for the Petitioner.
N Venkatraman, A.S.G., Mrs. Nisha Bagchi, Kailash Vasdev, Sr. Advs.,
Raj Bahadur Yadav, Mrs. Gargi Khanna, H. R. Rao, Mrs. Vimla Sinha,
Mrs. Ruchi Gaur Narula, Shlok Chandra, Navanjay Mahapatra, R.
Chandrachud, Dhuli Venkata Krishna, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Order
This writ petition is filed under Article 32 of the Constitution of India
as a Public Interest Litigation seeking the following prayers to be
granted in exercise of powers of this Court under Article 142 of the
Constitution:
“a. Issue a writ of Mandamus under Article 32 of the
Constitution of India or any other appropriate writ,
order or directions under Article 142 of the Constitution
790 [2024] 8 S.C.R.
Digital Supreme Court Reports
of the India to the Respondents to execute/carry out
the decision/directions of the Central Information
Commission given on 27th June, 2019 in the Second
Appeal No.CIC/LICOI/A/ 2018/611292-BJ of the
Petitioner.
b. Issue a writ of Mandamus under Article 32 of
the Constitution of India or any other appropriate
writ, order or directions under Article 142 of the
Constitution of the India to the Respondents to take
cognizance of the judgment passed by the Apex
Court in Writ Petition (Civil) No.1107 of 2017 dated
January 03, 2019 and initiate suitable necessary
action accordingly.
c. Issue order or directions to annul/strike down
clause(a) of sub-section (2) of Section 88DD of the
Income Tax which is against the objective of the
legislation and violating the fundamental rights of
the handicapped person provided under Article 14
of the Constitution of the India.
d. Pass such other orders and further orders as may
be deemed necessary on the facts and in the
circumstances of the case.”
2. We have heard Mr. Partha Sil learned counsel who has been
appointed to assist this Court and learned senior counsel Mr. Kailash
Vasdev for Respondent No.2 and learned senior counsel Ms. Nisha
Bagchi for Respondent-Union of India and perused the material on
record.
3. Having heard learned counsel for the respective parties, we find that
the concerns expressed by the petitioner in this writ petition have
been assuaged to a certain extent inasmuch as the Parliament has
amended Section 80DD of the Income Tax Act, 1961 (hereinafter
referred to as the “Act” for the sake of brevity). The said provision
deals with payment of annuity of a lump sum amount for the benefit
of a dependant, being a person with disability, in the event of death
of the individual or the member of a Hindu Undivided Family (HUF)
in whose name the subscription to the scheme stipulated in the said
provision has been made.
[2024] 8 S.C.R. 791
Ravi Agrawal v. Union of India & Another
4. For easy reference, the said provision is extracted as under:
“80DD. Deduction in respect of maintenance including
medical treatment of a dependent 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, the provisions of this sub-section shall
have effect as if for the words “seventy-five thousand
rupees”, the words “one hundred and twenty-five thousand
rupees” had been substituted.
(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;
792 [2024] 8 S.C.R.
Digital Supreme Court Reports
(b) the assessee nominates either the dependant,
being a person with disability or any other person
or a trust to receive the payment on his behalf,
for the benefit of the dependant, being a person
with disability.
(3) If the dependant, being a person with disability,
predeceases the individual or the member of the
Hindu undivided family referred to in sub-section (2),
an amount equal to the amount paid or deposited
under clause (b) of sub-section (1) shall be deemed
to be the income of the assessee of the previous year
in which such amount is received by the assessee
and shall accordingly be chargeable to tax as the
income of that previous year.
(4) The assessee, claiming a deduction under this
section, shall furnish a copy of the certificate issued
by the medical authority in the prescribed form and
manner, along with the return of income under section
139, in respect of the assessment year for which the
deduction is claimed:
Provided that where the condition of disability requires
reassessment of its extent after a period stipulated
in the aforesaid certificate, no deduction under this
section shall be allowed for any assessment year
relating to any previous year beginning after the
expiry of the previous year during which the aforesaid
certificate of disability had expired, unless a new
certificate is obtained from the medical authority in the
form and manner, as may be prescribed, and a copy
thereof is furnished along with the return of income.”
By virtue of the Finance Act, 2022, Section 80DD was amended with
effect from 01.04.2023, in the following terms:
(I) in sub-section (2), for clause (a), the following clause shall be
substituted, 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,––
[2024] 8 S.C.R. 793
Ravi Agrawal v. Union of India & Another
(i) 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; or
(ii) on attaining the age of sixty years or more
by such individual or the member of the Hindu
undivided family, and the payment or deposit to
such scheme has been discontinued;”;
(II) after sub-section (3), the following sub-section shall be inserted,
namely:–
“(3A) The provisions of sub-section (3) shall not
apply to the amount received by the dependant,
being a person with disability, before his death, by
way of annuity or lump sum by application of the
condition referred to in sub-clause (ii) of clause
(a) of sub-section (2).”
5. Learned counsel for the petitioner submitted that having regard to the
order passed by this Court in the case of Ravi Agrawal vs. Union of
India, being Writ Petition (C) No.1107/2017 disposed of on 03.01.2019
and the observations made therein, the Parliament has amended
Section 80DD of the Act in terms of Section 21 of the Finance Act,
2022. Consequently, on attaining the age of 60 years or more by an
individual subscriber or a member of an HUF, the payment or deposit
to the scheme envisaged under Section 80DD can be discontinued
and the monetary benefit which would have accumulated can be
made use of. It is submitted that the said amendment ought to be
made retrospective as the same is with effect from 01.04.2023 to the
existing policies as it will benefit a large number of subscribers who
are interested in making use of the benefit of the such policies for
the benefit of the disabled persons on turning 60 years of age. That
an option could be reserved to the subscribers to have the benefit of
the amendment in respect of policies which were made much prior
to 2014 as in the said year such policies have been discontinued.
He contended that if the amendment is given a retrospective effect,
many subscribers as well as disabled persons would benefit and
hence the concerns of the petitioner being purely in public interest
may be considered and relief may be granted.
794 [2024] 8 S.C.R.
Digital Supreme Court Reports
6. Per contra, learned senior counsel appearing for the respondent
contended that Section 80DD refers to a situation where the benefit
of the policy would be provided to a disabled person only on the death
or demise of the caregiver or the subscriber. The event at which the
benefit of the policy would be given to the disabled person is on the
death of the subscriber. It is only then the policy would come to end
and the monetary benefit would be given to the disabled person.
That there is a salient object with which the terms and conditions of
the policy have been devised. That having regard to the order of this
Court on 03.01.2019, there has been an insertion of a clause under
Section 80DD taking into consideration the concern expressed by
the very same petitioner herein in the earlier writ petition and to that
extent, amendment has been made. But it is too farfetched for the
petitioner to seek retrospective operation of the said amendment to
the existing policies. It was contended that the terms of the policies
cannot be changed subsequent to their crystallization and the
premiums being paid on the said terms. Therefore, there can be no
retrospective operation of the amendments.
7. We have considered the submissions advanced at the Bar in light of
the object of Section 80DD and the fact that pursuant to the order of
this Court, the Parliament has taken note of the observations made in
the said order and has amended Section 80DD as extracted above.
We find it difficult to accept the plea made by the learned counsel
for the petitioner to the effect that the said amendment be applied
retrospectively to policies which were taken prior to 2014 so that the
benefit of the amendment is given to those subscribers also. The
reasons are not far to see. The whole object of Jeevan Adhar Policy
is to benefit disabled persons by making provision by the subscriber
post his demise. The concern and apprehension of a caregiver or
subscriber of a policy for a disabled family member or other person
for whose benefit the policy is taken after the demise of the caregiver
is of utmost significance. It is only with that object that the caregiver
or a subscriber would take such a policy so that he would not leave
a disabled person in the lurch on his demise. If that is the object of
the policy then we do not think the subscriber or the caregiver of
the subscriber should be given the liberty to discontinue the policy
during his lifetime on attaining 60 years of age. That would only go
against the object with which the policy has been taken and against
the interest of the beneficiary, namely, a disabled person.
[2024] 8 S.C.R. 795
Ravi Agrawal v. Union of India & Another
8. In the circumstances, we do not think that the plea for retrospective
operation of the amendment is in the interest of the disabled persons
nor can this Court give a retrospective operation to the amendment.
This is particularly having regard to the fact that an insurance contract is
in a sense, a commercial contract, having certain terms and conditions
and the sub-stratum of the contract cannot be removed by giving a
retrospective operation to the amendment. The benefit under Section
80DD of the Act would have been availed by the subscribers at the
time when they have subscribed to the policy.
9. It is also relevant to note that the order passed by this Court on
10.02.2023 in Contempt Petition (C) No.408/2024 arising from W.P.(C)
No.1107/2017 (the earlier writ petition), this Court disposed of the
contempt petition for the reason that the Respondent-Union of India
had amended Section 80DD of the Act via Budget 2022-2023 Finance
Act and therefore, the grievance of the persons like the petitioner had
stood addressed though with prospective effect.
10. We have also considered the Proclamation on the Full Participation
and Equality of the People with Disabilities in the Asian and Pacific
Region, 1992; and the subsequent enactments, namely, the Persons
with Disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act, 1995 which has been substituted by the Rights of
Persons with Disabilities Act, 2016, as well as the Convention on the
Rights of Persons with Disabilities and Optional Protocol 2006; and,
the provisions of the Life Insurance Corporation Act, 1956.
11. In view of the said observations, we are not inclined to take a different
view of the matter and particularly having regard to the reasons
assigned by us as aforesaid.
In the circumstances, the writ petition stands disposed of.
We place on record our sincere appreciation for the valuable assistance
rendered by Mr. Partha Sil, learned counsel appointed to assist this
Court.
Result of the case: Writ petition disposed of.
†
Headnotes prepared by: Nidhi Jain
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