Singhal Vs DCIT (ITAT Jaipur)
The appeal was filed before the Income Tax Appellate Tribunal (ITAT), Jaipur, challenging the order dated 04.08.2025 passed by the Commissioner of Income Tax (Appeals) under section 250 of the Income Tax Act, 1961.
The primary issue in the appeal was whether the assessee was entitled to claim rebate under section 87A against the tax payable on short-term capital gains taxable under section 111A of the Act.
The assessee, an individual, had filed her return for Assessment Year 2024-25 declaring income under the heads “Capital Gains” and “Income from Other Sources.” She had opted for taxation under section 115BAC of the Act. During the relevant year, her income comprised a stipend received during Chartered Accountancy training, interest income from bank deposits, dividend income from listed shares, and short-term capital gains arising from the sale of listed shares taxable under section 111A.
Since the assessee’s total income was below the statutory threshold for claiming rebate under section 87A, she claimed the rebate in her return. However, while processing the return under section 143(1)(a), the Central Processing Centre (CPC) denied the rebate to the extent of tax payable on short-term capital gains taxable under section 111A. The CPC allowed the rebate only against tax computed at normal slab rates.
The assessee challenged the adjustment before the Commissioner of Income Tax (Appeals), who upheld the CPC’s action and confirmed the denial of rebate on tax payable under section 111A.
Before the Tribunal, the assessee contended that the issue had already been decided in favour of taxpayers by several decisions of different benches of the Income Tax Appellate Tribunal. It was argued that where a resident assessee had opted for taxation under section 115BAC and the total income was within the limit prescribed under section 87A, the rebate should also be available against tax payable on short-term capital gains taxable under section 111A. In support of this contention, reliance was placed on multiple ITAT decisions.
The Departmental Representative was unable to bring to the Tribunal’s notice any contrary judgment of the jurisdictional High Court or the Supreme Court. Nor were the decisions relied upon by the assessee distinguished on facts.
After considering the submissions, the Tribunal observed that the only dispute related to denial of rebate under section 87A in respect of tax payable at the special rate under section 111A. It noted that the issue already stood covered in favour of the assessee by various decisions of the Income Tax Appellate Tribunal cited during the hearing.
Accordingly, the Tribunal held that the denial of rebate under section 87A was not in accordance with law. It directed that the assessee be granted the rebate under section 87A of the Act.
As a result, the appeal of the assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
