JUDGEMENT
K.R. Dixit, Judicial Member -
(1.)THE first ground of appeal is that the A.A.C. erred in holding that the amount of Rs. 39,554 representing accumulation of superannuation fund received from the employer was exempt under Section 10(13) (ii).
(2.)The assessee was an employee of Shri Arbuda Mills Ltd. He had a massive coronary infraction and so he resigned. Thereupon he was paid the aforesaid sum. The ITO rejected the assessee's claim on the ground that the assessee's ill-health was only a temporary phase requiring rest to recover and not a permanent state leading to his not being able to do any work. According to the ITO the doctor had advised the assessee not to undertake more strenuous work but had not prohibited him from doing any work requiring "normal physical and mental capacity". Before the ITO the assessee had filed also another certificate as follows; being medical certificate from one Dr. Kiran J. Shah dated 18-2-82:
This is to certify that Mr. Manubhai K. Mehta has suffered from acute inferior wall myocardial infraction. He is disable to do any strenuous and active work at present.
The ITO noticed that for the assessment year 1984-85 the assessee had shown salary income of Rs. 42,920 which showed that the assessee was actively engaged in the work and, that, therefore, the assessee's claim did not deserve to be accepted. The Commissioner has allowed the assessee's claim merely stating that the aforesaid amount was exempt under Section 10(13)(ii).
Before us the learned departmental representative argued that the assessee had not been "incapacitated", which was required under the said provision. The assessee's counsel pointed out that the salary in the earlier employment was Rs. 8,000 whereas the salary in the new post was only Rs. 4,300 which showed that the assessee was not able to do any strenuous work. The assessee has contended before, the Commissioner, as seen from his grounds of appeal, that the section does not require that the assessee should be permanently incapacitated.
(3.)BEFORE us copies of the medical certificates filed earlier before the ITO have been filed. Now, the section grants exemption in respect of payment from the superannuation fund to "an employee in lieu of or in commutation of an annuity on his retirement on or after a specified age or on his becoming incapacitated prior to such retirement". In other words the case of an employee on his retirement at or after a specified age is to be on the same footing as that of an employee who becomes incapacitated prior to the retirement. The intention of the Legislature appears to be to give the benefit to the employee on his incapacity before retirement. If this employee would not have had the misfortune of being incapacitated sometime before the retirement date he would have had this benefit of exemption. Secondly an employee who retires in the normal course would get this exemption even though after retirement he may take on another employment. Therefore, in our view the word "incapacitated" here has to be interpreted to mean that this incapacity need not be permanent. All that is necessary is that the incapacity must result in the employee leaving his employment. Moreover the doctor, in such a case as the present one, can certify only regarding present condition of the employee concerned and state the reasonable period required for rest and recovery. He cannot be expected, in a case such as the present one, to state with any degree of certainty regarding the future. It may be that in some cases the doctor may be able to state that. But the section has to be interpreted to cover all cases. Therefore, in our view it is not necessary that the incapacity should be permanent. Since the payment is made at a particular time it is the incapacity at that point of time which is to be seen. It may be true that the assessee took another employment subsequently in June 1983. But that does not mean that the assessee was not incapacitated at the time when he resigned. We cannot overlook the fact that it was not in the assessee's financial interest to forego a much higher salary than the one which he was getting in the subsequent employment. Therefore, the genuineness also of the assessee's case regarding his incapacity near about the time of resignation cannot be doubted. We, therefore, confirm the order of the A.A.C. and reject this ground.
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