TaxTMI 
TaxTMI 
2026 (3) TMI 1753
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....r referred to as "the Act"] dated 28.02.2025, by the CPC, Bangalore for the assessment year 2024-25. 2. The brief facts of the case, as borne out from the records, are that the assessee is an individual, filed his return of income on 08.01.2025, declaring a total income of Rs.5,28,020/- for the assessment year 2024-25. The return of income was processed by the CPC, Bangalore and intimation u/s. 143(1) of the Act was issued on 28.02.2025 by making some adjustments and raising a demand of Rs.25,510/-. The CPC, Bangalore has rejected the rebate claimed u/s. 87A of the Act as the assessee had declared short term capital gains which is not eligible to claim rebate u/s. 87A of the Act. Aggrieved by the order u/s. 143(1) of the Act, the assesse....
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....er chapter XII of the Act. Hence, prayed for confirming the order of the ld.CIT(A). 6. We have heard the rival submissions and perused the material available on record and gone through the orders of the authorities along with the case laws relied on. The solitary issue before us for our adjudication is eligibility of rebate of tax u/s. 87A of the Act, where the total income consists of income chargeable to tax at special rates. 7. 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 tax liability computed on the "t....
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....ously clear, no different interpretation thereof can be adopted. Accordingly, we are of the view that the assessee is entitled for claim of rebate u/s 87A. The orders of lower authorities are therefore set aside and the Ld.AO is directed to allow the assessee its claim of rebate u/s 87A. All the grounds of appeal raised by the assessee are therefore allowed." 8. Further, we find support from the decision of the Coordinate Bench in Jayshreeben Jayantibhai Palsana Shingala Sheri v. ITO [ITA No.1014/Ahd/2025, order dated 12.08.2025], where it was held as under:- "5.8 The amended first proviso to section 87A [inserted by the Finance Act, 2023 w.e.f. A.Y. 2024-25] provides: "Where the total income of the assessee is chargeab....
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....thstanding anything contained in this Act but subject to the provisions of this Chapter..." 5.13 The purpose of this clause is to enable the computation of income tax under the concessional rate regime, subject to existing special rate provisions under Chapter XII, such as sections 111A, 112, 112A, etc. This clause governs the computation of tax and does not ipso facto affect eligibility to rebates or deductions unless specifically restricted. Section 87A is not part of Chapter XII; it is an independent rebate provision under Chapter VIII of the Act. Therefore, the overriding clause in section 115BAC(1A) does not derogate or modify section 87A, unless section 87A itself provides for exclusion, which, in the present case, it does no....
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.... 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, wher....