ITO Vs Akansha Jain (ITAT Jaipur)
A Debatable Issue Cannot Be Settled by CPC’s Algorithm — Section 87A Rebate on STCG Restored
The Jaipur Bench of the ITAT has held that, for AY 2024-25, rebate u/s 87A was available against tax payable on short-term capital gains u/s 111A where the resident individual’s total income did not exceed ₹7 lakh under the new tax regime. The Tribunal also upheld the CIT(A)’s finding that a contentious issue requiring interpretation of sections 87A, 111A and 115BAC could not be summarily decided against the assessee through an adjustment u/s 143(1).
The assessee, Akansha Jain, filed her return under the new tax regime declaring a total income of ₹4,66,310. The income included STCG of ₹2,21,200 taxable at the special rate prescribed u/s 111A.
Since the total income was below ₹7 lakh, the assessee claimed rebate of ₹24,947 u/s 87A. CPC denied the rebate while processing the return u/s 143(1).
The assessee challenged the adjustment before the CIT(A). The CIT(A) noted that the Bombay High Court, in The Chamber of Tax Consultants v. Director General of Income-tax (Systems), dated 24.01.2025, had examined the Department’s decision to modify the ITR utility so as to prevent taxpayers from claiming section 87A rebate against special-rate income.
