INCOME TAX OFFICER, JAIPUR vs. RAKESH KUMAR MALANI, JAIPUR

ITA 1425/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, where 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, and the Revenue's representative was unable to present any contrary decision from a jurisdictional High Court or the Supreme Court, nor could they distinguish the decision of the Ahmedabad Bench in Jayshreeben Jayantibhai Palsana vs. ITO (ITA No. 1014/Ahd/2025), which allowed a similar rebate for AY 2024-25. The Tribunal also referred to its own decision in ITA No. 1412/JPR/2025 for AY 2024-25, which held the rebate allowable in such situations. Respectfully following these decisions, the Tribunal found the Addl./JCIT(A)'s order 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 in appeal against the order of the Additional/Joint Commissioner of Income Tax (Appeals) [Addl./JCIT(A)] dated 30.03.2026 for Assessment Year 2025-26. The dispute concerns a rectification order dated 25.02.2026 passed by the Assessing Officer at the Centralized Processing Centre (CPC) under section 154 of the Income Tax Act, 1961. The assessee, Rakesh Kumar Malani, filed his return of income opting for the tax regime under section 115BAC. He claimed a rebate of Rs. 20,035 under section 87A against tax on short-term capital gain (STCG) under section 111A. The AO at CPC disallowed this rebate via an intimation under section 143(1) dated 29.01.2026. The assessee's rectification request under section 154 was rejected. The Addl./JCIT(A) allowed the assessee's appeal, directing the AO to grant the rebate.

What were the issues?

1. Whether on the facts and circumstances of the case and in law, the Addl./JCIT (A) is justified in allowing the rebate under section 87A of the Act on STCG, when rebate under section 87A is not available in respect of income tax payable on income chargeable to tax at special rates, including STCG under section 111A? 2. Whether on the facts and circumstances of the case and in law, the order of the Addl./JCIT (A) is justified in view of CBDT Circular No. 13/2025, which clarifies that it was never the statutory intent to allow rebate in cases where it is erroneously claimed and such claims are to be rectified? Assessee's contentions: None recorded. Revenue's contentions: The Revenue argued that rebate under section 87A is not available for STCG under section 111A, as it is income taxable at special rates. It also relied on CBDT Circular No. 13/2025, stating that the statutory intent was not to allow such rebates and erroneous claims should be rectified.

Which sections of the Income-tax Act were involved?

Section 154,Section 87A,Section 111A,Section 115BAC,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)-5, Chennai, [hereinafter referred to as “Addl./JCIT(A)”] dated 30.03.2026 for the Assessment Year 2025-26 arising out of the rectification order dated 25.02.2026 passed by the Assessing Officer at the Centralized Processing

I.T.A No. 1425/JPR/2026 Page No 2 Rakesh Kumar Malani

Centre (hereinafter referred to as “the AO at the CPC”) under section 154 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”),

2.

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

The order continues below.

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