Kanhaiya Lal Panchal Vs BPL-W-(91)(95) (ITAT Indore)
The Income Tax Appellate Tribunal, Indore Bench adjudicated an appeal for AY 2024–25 arising from a rectification order under Section 154 and the first appellate order of the NFAC. The assessee, a resident individual, filed a return declaring total income of ₹4,15,620 comprising salary, short-term capital gains (STCG), long-term capital gains (LTCG), income from other sources, and agricultural income. He opted for the new tax regime under Section 115BAC(1A), computed tax of ₹22,536, and claimed full rebate under Section 87A, resulting in nil tax. While processing the return under Section 143(1), the Assessing Officer (AO) accepted the income but allowed only ₹200 as rebate, disallowing ₹22,336 and raising demand with interest. A rectification application was rejected, and the NFAC upheld the denial, prompting the appeal.
The disputed tax components were: (i) ₹12 on STCG taxable under Section 111A, (ii) ₹22,279 on LTCG taxable under Section 112, and (iii) ₹45 on income from transfer of a virtual digital asset (VDA) taxable at 30%. The assessee contended that Section 87A, as amended by the Finance Act, 2023 for AY 2024–25, grants rebate based on “total income” for residents opting for Section 115BAC(1A) where total income does not exceed ₹7 lakh, without excluding incomes taxed at special rates—except where the statute expressly provides otherwise. He argued that the only express exclusion is in Section 112A(6) (for specified equity LTCG), and no such bar exists for Section 111A or Section 112. Reliance by the NFAC on the Finance Bill, 2025 memorandum was challenged as prospective and non-binding.
