"We Don't Think That It's In Interest Of Disabled Persons": SC Refuses To Give Retrospective Operation To Amendment To Section 80DD Income Tax Act
The Supreme Court refused to give retrospective operation of the amendment of Section 80DD of the Income Tax Act.
The Court disagreed with the submission that the retrospective operation of the amendment is in the interest of the disabled persons.
The writ petition, filed under Article 32 of the Constitution as a Public Interest Litigation (PIL), sought the retrospective application of the amendment to Section 80DD introduced by the Finance Act, 2022. This amendment allows an individual subscriber or a member of a Hindu Undivided Family (HUF), upon reaching the age of 60, to discontinue payments or deposits to the scheme under Section 80DD and utilise the accumulated monetary benefits.
A Bench of Justice B.V. Nagarathna and Justice Nongmeikapam Kotiswar Singh observed, “The whole object of Jeevan Adhar Policy is to benefit disabled persons by making provision by the subscriber post his demise…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.”
AOR Partha Sil represented the petitioner, while Sr. Advocates Nisha Bagchi and Kailash Vasdev appeared for the respondents.
Section 80DD of the Income Tax Act, 1961 (the Act) deals with the payment of annuity of a lump sum amount for the benefit of a disabled dependant in the event of the 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.
The Court stated that the concern and apprehension of a caregiver or subscriber of the Jeevan Adhar Policy for a disabled family member or other person for whose benefit the policy is taken after the demise of the caregiver was of utmost significance.
“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 Court observed.
The Court also stated that the Apex Court in 2019 had disposed of a contempt petition because the Government 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.
Consequently, the Court held that “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.”
The Bench explained that an insurance contract is 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,” the Court remarked.
Accordingly, the Supreme Court disposed of the writ petition.
Cause Title: Ravi Agrawal v. Union of India & Anr. (Neutral Citation: 2024 INSC 648)
Appearance:
Petitioner: AOR Partha Sil; Advocates Tavish Bhushan Prasad, Sayani Bhattacharya, Abhiraj Chowdhary, Anirudh Gupta and Chirag Joshi
Respondent: Sr. Advocate Nisha Bagchi and Kailash Vasdev; ASG N Venkatraman; AOR Raj Bahadur Yadav and R. Chandrachud; Advocates Gargi Khanna, H R Rao, Vimla Sinha, Ruchi Gaur Narula, Shlok Chandra, Navanjay Mahapatra and Dhuli Venkata Krishna