Yes it can, but only under exceptional circumstances.
Institutions are urged to claim justification only with great caution. The reasons must always be ‘material to the circumstances of the particular case and substantial’.
Note that the DDA does not require an institution to do anything that might compromise academic standards. But this argument should be used with great care and after considering all the issues and looking at all possible reasonable adjustments.
Institutions are warned that they must make individual judgements, and not stereotyped assumptions about people with particular impairments.