TaxTMI 
TaxTMI 
2025 (10) TMI 1357
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 25,000. 2. The Learned CIT(A) has incorrectly interpreted the proviso to Section 87A. The provision entities an assessee to a rebate if their "total income" does not exceed Rs. 7,00,000. The law does not provide for excluding any part of the total income, such as capital gains, for determining this eligibility threshold. 3. The Learned. CIT(A) was not justified in relying on the Memorandum to Finance Bill 2025 to deny a benefit available for the Assessment Year 2024-25. It is a settled principle that a subsequent clarification cannot be used to interpret the law for a prior assessment year to the detriment of the assessee. "Section 87A as amended by Finance Act 2023 makes no such exclusion for LTCG. 4. The learned CIT(A) dismissed the appeal without granting an effective opportunity of being heard, violating the principles of natural justice. 5. The order passed is erroneous, unjust, and liable to be quashed. 6. Any other grounds that may be urged at the time of hearing. 3. The assessee, an individual, filed his return of income for the A.Y. 2024-25 on 26.07.2024 declaring a total income of Rs. 6,75,940/- and claimed a rebate of inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....section 87A of the Act. The ld. AR, therefore, prayed that the order of the ld. CIT(A) be set aside and the assessee's claim for rebate of Rs. 25,000/- u/s.87A of the Act be allowed. 6. The ld. DR vehemently supported the order of the ld. CIT(A) and contended that the provisions of Section 115BAC(1A) of the Act do not extend to income which is liable to be taxed at the special rates prescribed under Chapter XII of the Act. It was thus submitted by the ld. DR that the assessee is not eligible to claim the rebate of Rs. 25,000/- under Section 87A of the Act. 7. We have heard the rival submissions and carefully perused the orders of the lower authorities as well as the material placed on record. The sole issue arising for our adjudication is whether the assessee is entitled to rebate of tax u/s. 87A of the Act where the total income consists, inter alia, of income chargeable to tax at special rates. 8. We note that an identical issue came up for consideration before this Tribunal in the case of Venkatachalam Venkatraman v. ITO [ITA No. 1431/Chny/2025, order dated 20.08.2025]. The Tribunal therein held that the provisions of section 87A of the Act provide rebate on the entire ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red thousand rupees, the assessee shall be entitled to a deduction..." 5.9 This provision applies to any resident individual whose total income does not exceed Rs. 7,00,000 and who is assessed under section 115BAC(1A). The statute does not draw any distinction between normal income and income chargeable at special rates, nor does it contain any express exclusion for tax arising under section 111A. 5.10 By contrast, the legislature has inserted an express bar on availability of section 87A rebate in section 112A(6), which states: (6) Where the total income of an assessee includes any long-term capital gains referred to in sub-section (1), the rebate under section 87A shall be allowed from the income-tax on the total income as reduced by tax payable on such capital gains. 5.11 The absence of a corresponding clause in section 111A is legally significant and supports the principle that - when the legislature intended to deny rebate in respect of special income (as in section 112A), it has done so expressly. In contrast, the absence of any exclusion in section 111A or in section 87A must be construed in favour of the assessee. 5.12 At this po....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Hon'ble Court refrained from interpreting the substantive provisions, it held that the assessee must be allowed to claim rebate under section 87A, and it is for the quasi-judicial authority to decide on merits. Thus, the Hon'ble High Court clearly held that the CPC utility or system configuration cannot override statutory rights, and that each case must be adjudicated on its own merits. We at the Tribunal, being such a quasi-judicial authority, are therefore duty-bound to examine the claim in light of the statutory framework and not be influenced by automated denial or procedural logic adopted by the CPC. 5.16 The assessee has also relied on an appellate order dated 27.05.2025 passed by CIT(A)-1, Nagpur in the case of Avni Milanbhai Maniya, wherein on identical facts the CIT(A) allowed the claim of rebate under section 87A in respect of STCG taxable under section 111A. We also note that such decision was taken by the JCIT/Addl. CIT(A) relying on the decision of Beena Manishbhai Fofaria for the A.Y. 2024-25. While not binding, the said appellate order affirms that divergent views exist and such benefit has been allowed in similar factual circumstances. 5.17 In vi....