ITAT Chennai Allows Section 87A Rebate on Special Rate Income

By CA Sandeep Kanoi Income Tax Judiciary September 2, 2026

TaxGuru Citation: 2026 taxguru.in 12169
Case Name: Pranay M Kothari Vs DCIT (ITAT Chennai)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2024-25
Courts: All ITAT, ITAT Chennai

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Pranay M Kothari Vs DCIT (ITAT Chennai)

The Chennai Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal and directed the Assessing Officer to allow rebate of Rs.25,000/- under section 87A of the Income-tax Act, 1961 for assessment year 2024-25. The dispute arose after the CPC, Bangalore denied the rebate while processing the return under section 143(1), and the ld.CIT(A) confirmed the denial.

The Tribunal considered whether rebate under section 87A is available where the assessee’s total income includes income chargeable to tax at special rates. Relying on the coordinate bench decision in Venkatachalam Venkatraman v. ITO and the decision in Jayshreeben Jayantibhai Palsana Shingala Sheri v. ITO, the Tribunal held that the assessee was entitled to the rebate. The Tribunal observed that the relevant provisions did not provide an exclusion merely because the total income included income taxable at special rates.

The Tribunal accordingly directed the AO to allow the rebate of Rs.25,000/- claimed under section 87A and recompute the tax liability. The appeal was allowed.

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