Venkedapathy Venugopal Vs ITO (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT), Chennai allowed the assessee’s appeal against the order dated 29.05.2025 passed by the Commissioner of Income Tax (Appeals), Addl./JCIT(A)-2, Delhi, arising from the intimation issued under Section 143(1) by the Centralized Processing Centre (CPC), Bengaluru, for Assessment Year (AY) 2024-25. The dispute concerned the denial of rebate of ₹25,000 under Section 87A of the Income-tax Act, 1961.
The assessee challenged the order on the ground that the CIT(A) had wrongly confirmed the denial of rebate under Section 87A, incorrectly interpreted the proviso to Section 87A, relied upon the Memorandum to the Finance Bill, 2025 for AY 2024-25, violated the principles of natural justice by not granting an effective opportunity of hearing, and passed an erroneous order.
The assessee had filed the return of income on 26.07.2024, declaring total income of ₹6,75,940 and claiming a rebate of ₹25,000 under Section 87A. The returned income included taxable long-term capital gains of ₹4,72,175, and the rebate claimed related to the tax payable on such capital gains. The CPC processed the return under Section 143(1) on 15.04.2025 and denied the rebate without specifying the precise reasons. The CIT(A) upheld the denial, holding that rebate under Section 87A is not available in respect of income chargeable at special rates, since Section 115BAC(1A) is subject to the provisions of Chapter XII, which governs taxation in special cases.
