TaxTMI 
TaxTMI 
2026 (3) TMI 1722
X X X X Extracts X X X X
X X X X Extracts X X X X
....re the Ld. CIT(A), who has dismissed the assessee's appeal and against the said order, the assessee is in appeal before us. 3. During the course of hearing, the Ld.AR submitted that the 1st proviso to section 87A of the Act as inserted by the Finance Act, 2023 w.e.f. AY. 2024-25 grants a tax rebate to a resident individual, who has opted for taxation under the new tax regime u/s. 115BAC(1A) of the Act and whose total income does not exceed Rs. 7 lakhs. It was submitted that the 1st proviso to section 87A of the Act does not impose any restriction on the nature of income or exclude income tax at special rates under Chapter XII. It was submitted that the 1st proviso to section 87A speaks of the expression "total income" and allows deduction from the amount with income tax, without any exclusion of income taxable u/s. 111A of the Act. In contrast, section 112A(6) specifically provide that rebate u/s. 87A shall not be allowed in respect of Long Term Capital Gain taxable under that section exceeding Rs. 1 lakh. It was submitted that no such exclusion is provided either in section 111A or in 87A of the Act. It was further submitted that by virtue of the Finance Act, 2025, section 87A ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the special rate under section 111A. Once such income forms part of the total income, the tax liability attributable to that income becomes chargeable under the special-rate regime and does not qualify for rebate u/s 87A. The language of section 87A must be read harmoniously with the specific charging provisions under Chapter XII. The absence of an explicit exclusion in section 87A regarding STCG does not override the legislative architecture wherein special-rate incomes are carved out distinctly. Therefore, the AO/CPC correctly denied the claim. It was also submitted that the assessee's contention that a composite reading of sections 87A, 111A, and 112A supports allowance of rebate cannot be sustained. The statutory scheme does not permit merging special-rate tax with normal rate tax for purposes of rebate. The analysis undertaken by the AO/CPC is correct, system-validated, and in conformity with the law. The assessee has not produced any conclusive or persuasive evidence to demonstrate eligibility for rebate u/s. 87A and the order of the ld CIT(A) be confirmed. 6. We have heard the rival contentions and perused the material available on record. We find that the matter is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 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 point we discuss the interplay of Section 1158AC(LA) with Chapter XII where the scope is Confined to Computation of Tax Rates. Section 115BAC(1A) opens with the phrase: "Notwithstanding anything contained....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 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 Milanhhai 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/AddI. CIT(A) relving 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 view of the above discussion, we find that the assessee is a resident individual and the total income declared for the assessment year 2024-25 does not exceed Rs.7,00,000. It is also an admitt....