Ratika Mittal Vs ITO (ITAT Jaipur)
Summary: ITAT Jaipur considered two appeals involving the common issue of whether the CPC, while processing returns under Section 143(1) of the Income Tax Act, 1961, could disallow rebate under Section 87A where the assessees had earned Short Term Capital Gains taxed at a concessional rate. The CPC had treated the rebate claim as an impermissible double benefit because the assessees had already received concessional taxation on their Short Term Capital Gains. The Tribunal observed that entitlement to Section 87A rebate in circumstances where Short Term Capital Gains had been taxed at a concessional rate was a matter of debate. It held that the CPC, while processing the returns under Section 143(1), had no power to make such adjustments on the disputed issue. Consequently, the Tribunal found that the CPC lacked jurisdiction to make the impugned adjustments and ordered deletion of the additions. Both appeals were allowed. The order was pronounced under Rule 34 of the ITAT Rules, 1963, on 08.04.2026.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
The captioned appeals havebeen preferred by the two different assessees against the separate orders o f Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as “Ld. CIT(A)”] dated 02.12.2025 and 10.11.2025 respectively u/s 250 of the Income Tax Act, 1961 (in short “Act”).
2. Since identical issues are involved in both the appeals, hence both the appeals are heard together and are being disposed of by this common order.
3. The sole issue raised in both the appeals is as to whether the CPC while processing the return u/s 143(1) of the Act can make a disallowance on the ground that since the assessee had been taxed at a lower tax in respect of Short Term Capital Gains earned by the assessee and thereafter, the assessee is not eligible to claim rebate u/s 87A of the Act, because of the income of the assessee is less than the prescribed limit. The CPC while making the impugned disallowance observed that the assessee has taken a benefit of concessional rate of tax in respect of Short Term Capital Gains. Therefore, the assessee cannot be given double benefit of concession u/s 87A of the Act.
4. Without going into the merits of the appeals, it is observed that whether the assessee is entitled to take the benefit of rebate u/s 87A of the Act having got the Short Term Capital Gains tax at concessional rate is matter of debate. The CPC u/s 143(1) has no powers to make such adjustments while processing the return of income.
5. In view of the above, the CPC had no jurisdiction to make the impugned adjustments. Therefore, the impugned additions made by the CPC are ordered to be deleted.
6. In the result, both the appeals of the different assessees stands allowed.
Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 08.04.2026
