ITO Vs Ruchi Gadia (ITAT Jaipur)
Jaipur ITAT: Section 87A Rebate Allowed Against Tax on Section 111A STCG for AY 2024-25 – CBDT Circular No. 13/2025 Does Not Alter Settled Tribunal View
The assessee opted for the new tax regime under Section 115BAC for AY 2024-25 and claimed rebate of ₹24,674 under Section 87A against tax computed on short-term capital gains taxable under Section 111A. CPC subsequently passed a rectification order under Section 154 disallowing the rebate. On appeal, the Addl./JCIT(A) allowed the assessee’s claim and directed CPC to grant the rebate.
The Revenue challenged the relief before the ITAT, arguing that Section 87A rebate is unavailable against tax payable on income chargeable at special rates, including STCG under Section 111A. Revenue specifically relied upon CBDT Circular No. 13/2025, which, according to it, clarified that allowing such rebate was never the statutory intention.
The Jaipur ITAT noted that the issue was squarely covered in favour of the assessee by the Ahmedabad ITAT decision in Jayshreeben Jayantibhai Palsana v. ITO, ITA No. 1014/Ahd/2025, which allowed Section 87A rebate for AY 2024-25. The Jaipur Bench itself had already taken the same view in ITA No. 1412/JPR/2025 dated 25.06.2026.
Significantly, the Department could not produce any contrary judgment of the jurisdictional High Court or the Supreme Court. Following the coordinate-bench decisions, the ITAT held that the Section 87A rebate granted against tax on Section 111A STCG for AY 2024-25 was in accordance with law and required no interference.
Cases Discussed:
- Jayshreeben Jayantibhai Palsana vs. ITO (Ahmedabad ITAT), ITA No. 1014/Ahd/2025
FULL TEXT OF THE ORDER OF ITAT JAIPUR
1. This appeal by the Revenue is directed against the order of the learned Additional/Joint Commissioner of Income Tax (Appeals)-12, Mumbai, [hereinafter referred to as “Addl./JCIT(A)”] dated 03.12.2025 for the Assessment Year 2024-25 arising out of the rectification order dated 05.02.2025 passed by the Assessing Officer at the Centralized Processing Centre (hereinafter referred to as “the AO at the CPC”) under section 154 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”),
