INCOME TAX OFFICER, TONK vs. DHARAM CHAND JAIN, TONK

ITA 1388/JPR/2026Status: DisposedITAT Jaipur21 October 2026AY 2025-264 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the rebate under Section 87A of the Act is allowable on the tax computed on short-term capital gain offered to tax under Section 111A of the Act, even when the assessee has opted for the tax regime under Section 115BAC of the Act for Assessment Year 2025-26. The Tribunal noted that the assessee did not appear, but the learned Departmental Representative could not provide any contrary decision from the jurisdictional High Court or the Supreme Court, nor could they distinguish the decision relied upon by the learned Addl. CIT(A). The Tribunal also referred to its own prior decision in ITA No. 1412/JPR/2025 for AY 2024-25, which dealt with identical facts and held that the rebate under Section 87A is allowable. Respectfully following the settled view of coordinate benches and the absence of contrary precedent, the Tribunal found the rebate allowed by the Addl./JCIT(A) to be in accordance with law and not requiring interference. The appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue is appealing an order of the Additional/Joint Commissioner of Income Tax (Appeals) dated 27.03.2026 for Assessment Year 2025-26. This order allowed a rebate under Section 87A of the Income Tax Act, 1961, to the assessee, Dharam Chand Jain. The Assessing Officer at the Centralized Processing Centre had initially disallowed this rebate via an intimation order under Section 143(1) dated 05.03.2026. The assessee had filed their return opting for the tax regime under Section 115BAC and claimed a rebate of Rs. 19,427 against tax computed on short-term capital gains taxable under Section 111A. The Addl./JCIT(A) reversed the AO's decision, directing the rebate to be granted.

What were the issues?

1. Whether, on the facts and in law, the Ld. Addl. CIT(A) was justified in allowing the rebate under Section 87A of the Act on Short Term Capital Gains (STCG), when rebate under Section 87A is not available for income chargeable to tax at special rates, including STCG under Section 111A of the Act? 2. Whether, on the facts and in law, the order of the Ld. Addl. CIT(A) was justified in light of CBDT Circular No. 13/2025 dated 19.09.2025, which clarified that the statutory intent was not to allow rebate in cases where income is chargeable under Section 115BAC(1) of the Act, and such claims are to be rectified? Assessee's Contentions: None appeared on behalf of the assessee. The Addl./JCIT(A) had allowed the appeal relying on Jayshreeben Jayantibhai Palsana vs. ITO (ITA No. 1014/Ahd/2025). Revenue's Contentions: The Revenue argued that rebate under Section 87A is not available for STCG under Section 111A and cited CBDT Circular No. 13/2025 to support the view that such claims were statutorily impermissible, especially when opting for the Section 115BAC regime.

Which sections of the Income-tax Act were involved?

Section 111A,Section 115BAC,Section 87A,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Shri Kuldip Singh & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Revenue is directed against the order of the learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Coimbatore, [hereinafter referred to as “Addl./JCIT(A)”] dated 27.03.2026 for the Assessment Year 2025-26 arising out of the intimation order dated 05.03.2026 passed by the Assessing Officer at the Centralized Processing Centre (hereinafter referred to as “the AO at the CPC”) under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”),

I.T.A No. 1388/JPR/2026 Page No 2 Dharam Chand Jain

2.

The grounds of appeal raised by the Revenue before us in the memorandum of appeal in Form No. 36 read as under:

1.

Whether on the facts and circumstances o

The order continues below.

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