INCOME TAX OFFICER, JHUNJHUNU vs. SHASHI KANT TULSIAN, JHUNJHUNU

ITA 620/JPR/2026Status: DisposedITAT Jaipur06 October 2026AY 2024-2512 pages
AI SummaryDismissed

What were the facts?

The Revenue is in appeal against the order of the Ld. CIT(A) dated 20.01.2026, allowing rebate under Section 87A of the Income Tax Act, 1961. The assessee, Shashi Kant Tulsian, filed his return of income for Assessment Year 2024-25 on 20.06.2024, declaring a total income of Rs. 4,32,280/-, which included short-term capital gain (STCG) of Rs. 2,12,152/-. The assessee claimed a rebate of Rs. 19,857/- under Section 87A. The CPC denied this rebate in its intimation under Section 143(1). The assessee's rectification application under Section 154 was dismissed by the AO. The Ld. CIT(A) allowed the assessee's claim, leading to the present appeal by the Revenue.

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to rebate under Section 87A for Assessment Year 2024-25. The reasoning was based on a plain reading of the statutory provisions, which do not contain any express bar either in Section 87A or Section 111A for denial of rebate in respect of tax payable on short-term capital gains arising from the transfer of listed equity shares taxable at special rates under Section 111A. The Tribunal noted that the legislative intent is further clarified by the prospective amendment proposed in the Finance Bill, 2025, which reinforces that no such restriction was in force during the relevant assessment year. The denial of rebate by the CPC was considered to be based solely on system-driven logic, not on any statutory mandate. The Tribunal respectfully followed the ratio laid down in the case of Jayshreeben Jayantibhai Palsana vs. ITO (ITAT, Ahmedabad) and other similar decisions. The Tribunal directed the AO to allow the rebate of Rs. 19,857/- claimed by the assessee under Section 87A and recompute the tax liability. The grounds of appeal raised by the Revenue were dismissed.

What were the issues?

1. Whether, on the facts and in law, the Ld. Addl.CIT(A) was justified in allowing rebate under Section 87A on STCG, when rebate is not available on income chargeable to tax at special rates, including STCG under Section 111A? 2. Whether, on the facts and in law, the order of the Ld. Addl.CIT(A) is justified in light of CBDT Circular No. 13/2025, which clarifies that rebate under Section 87A was never intended for income chargeable under Section 115BAC(1)? Assessee's Contentions (as per the Tribunal's analysis and reliance on other orders): - The amended Section 87A, applicable for AY 2024-25, does not contain any express restriction denying rebate on STCG under Section 111A. - The legislature has expressly provided for denial of rebate in Section 112A(6) for long-term capital gains, and the absence of a similar clause for Section 111A is significant. - Section 115BAC(1A) governs the computation of tax under the new regime but does not ipso facto affect eligibility to rebates unless specifically restricted. Section 87A is an independent provision under Chapter VIII. - Reliance was placed on the decision of the Hon'ble ITAT, Ahmedabad in Jayshreeben Jayantibhai Palsana vs. ITO for AY 2024-25, which held that a resident individual opting for Section 115BAC(1A) with total income below Rs. 7,00,000/- is eligible for rebate under Section 87A against tax payable on STCG under Section 111A. - Reliance was also placed on the Bombay High Court's decision in The Chamber of Tax Consultants vs. Director General of Income Tax (Systems), which held that system-based denial cannot override statutory rights. Revenue's Contentions: - The Ld. DR was unable to distinguish the decisions referred to by the Tribunal or draw attention to any contrary decision of the Jurisdictional High Court or the Hon'ble Apex Court.

Which sections of the Income-tax Act were involved?

Section 87A,Section 111A,Section 115BAC(1A),Section 143(1),Section 154,Section 250,Section 112A(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “B” BENCH, JAIPUR

Before: SMT. ANNAPURNA GUPTA & SHRI T. R. SENTHIL KUMAR

Hearing: 01.10.2026Pronounced: 06.10.2026

Per Annapurna Gupta, AM:- The present appeal has been filed by the Revenue against the order passed by the Office of the Commissioner of Income Tax, Appeal Addl./JCIT(A) Bhubaneswar (hereinafter referred to as “Ld. CIT(A)”), dated 20.01.2026 under Section 250of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

P a g e | 2 Shashi Kant Tulsian

2.

The grounds raised read as under:-

1.

Whether on the facts and circumstances of the case and in law, the Ld. Addl.CIT(A), Bhubneswar is justified in allowing the rebate U/s 87A of the Act, on STCG, when rebate U/s 87A of the Act is not available in respect of Income Tax payable on income chargeable to tax on special rates, which incl

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 87A

All 81 judgments and leading authorities on Section 87A →

Recent GST High Court judgments

Search GST case law →