INCOME TAX OFFICER, TONK vs. MAHIMA SAHU, TONK

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ITA 1359/JPR/2026Status: DisposedITAT Jaipur22 October 2026AY 2025-264 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) had correctly considered the proviso to Section 87A of the Act. This proviso allows a rebate under Section 87A if the assessee's total income is chargeable under Section 115BAC(1A) and does not exceed Rs. 7,00,000. The assessee's total income was Rs. 4,89,910, which is below the Rs. 7,00,000 threshold. Therefore, the assessee is entitled to claim the rebate under Section 87A. The Tribunal found the Ld. CIT(A)'s order to be well-reasoned and that the restriction of the rebate by the AO/CPC was not sustainable in law. The appeal filed by the Revenue was dismissed. The issue regarding STCG and Section 111A was implicitly addressed by focusing on the proviso to Section 87A and the total income threshold under Section 115BAC(1A), indicating that the primary consideration was the eligibility based on total income and the specific tax regime opted for, rather than the nature of income alone.

What were the facts?

The Income Tax Officer (appellant) filed an appeal against the order dated 12.03.2026 passed by the Additional/Joint Commissioner Income Tax (Appeals) [Addl./JCIT(A)] for Assessment Year 2025-26. The assessee, Mahima Sahu, a salaried employee, claimed a rebate under Section 87A of Rs. 24,995. The Assessing Officer (AO)/CPC restricted this rebate to Rs. 4,329. The assessee appealed to the Addl./JCIT(A), who deleted the disallowance and allowed the appeal. The Revenue, aggrieved by this order, has approached the Income Tax Appellate Tribunal (ITAT). The assessee did not appear for the hearing, and the appeal was decided based on the available record and the Revenue's representative.

What were the issues?

1. Whether on the facts and circumstances of the case and in law, the Ld. Addl CIT(A) is justified in allowing the rebate u/s 87A of the Act on STCG, when rebate u/s 87A is not available in respect of income chargeable to tax at special rates, including Short Term Capital Gain u/s 111A? 2. Whether on the facts and circumstances of the case and in law, the order of the Ld. Addl CIT(A) is justified in view of CBDT Circular No. 13/2025, dated 19.09.2025, which clarifies that it was never the statutory intent to allow rebate in cases where income is chargeable to tax u/s 115BAC(1) and such claims are to be rectified? Assessee's contentions: Not recorded as the assessee did not appear. Revenue's contentions: The rebate under Section 87A is not available for income chargeable to tax at special rates, such as Short Term Capital Gain under Section 111A. The Revenue also relied on CBDT Circular No. 13/2025, stating that the intent was not to allow rebate in cases under Section 115BAC(1) and that erroneous claims should be rectified.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “SMC” BENCH, JAIPUR

Before: SHRI KULDIP SINGH & SHRI PRAKASH, ACCOUNTANCT MEMBER

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “SMC” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER & SHRI PRAKASH, ACCOUNTANCT MEMBER ITA No: 1359/JPR/2026 Assessment Year: 2025-26

Income Tax Officer Mahima Sahu Tonk Ward No. 10, Bangali (Appellant) Vs Colony, Deoli, Th. Deoli, Tonk. PAN: OPCPS7910Q (Respondent)

Assessee Represented: Sh. None Revenue Represented: Mrs. Arti Rawat, JCIT Date of hearing : 07-10-2026 Date of pronouncement : 22-10-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Income Tax Officer by filing the present appeal, sought to set aside the impugned order dated 12.03.2026 passed by the Additional/Joint Commissioner Income Tax (Appeals), Mysore [hereinafter referred to as the ‘Addl./JCIT(A)’] qua assessment year 2025-26 on the grounds inter-alia that:- “1. Whether on the facts and circumstances of the case and in law, the Ld. Addl CIT(A)-Mysore is justified in allowing the rebate u/s 87A of the Act, on STCG, when rebate u/s 87A of the Act, 1961 is not available in respect of

I.T.A No. 1359/JPR/2026 Page No 2 Mahima Sahu

Income Tax payable on income chargeable to tax on special rates, which includes Short Term Capital Gain u/s 111A of the Act? 2. Whether on the facts and circumstances of the case and in law, the order of the Ld. Addl CIT(A)-Mysore is justified in view of the CBDT Circular No. 13/2025, dated 19.09.2025 which has made it expressly clear that it was never the statutory intent to allow rebate in cases where income is chargeable to tax u/s 115BAC(1) of the Act, 1961 and any such cases where rebate is erroneously claimed are to be rectified, thereby having no doubt that such claim was statutorily never permissible? 3. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.” 2. The assessee has not come present despite service, do the Bench has decided to dispose off the appeal on the basis of material available on record with the assistance of the Ld. DR for the Revenue. 3. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : Assessee is a salaried employee claimed a rebate u/s 87A of the Act to the tune of Rs. 24,995/-, which was restricted to Rs. 4,329/- by the AO/CPC. 4. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal, who has deleted the disallowance by allowing the appeal. Being aggrieved with the impugned order passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal.

I.T.A No. 1359/JPR/2026 Page No 3 Mahima Sahu

5.

We have heard Ld. DR for the Revenue and perused the record available on file. 6. Bare perusal of the impugned order under challenge goes to prove that Ld. CIT(A) has duly thrashed the issue in the light of the proviso to section 87 of the Act, where the total income of the assessee is chargeable to tax u/s 115BAC(1A) of the Act and if the total income of the assessee does not exceed Rs. 7,00,000/- he/she shall be entitled for deduction u/s 87A of the Act from the amount of income tax. Since the income of the assessee does not exceed Rs. 7,00,000/- (having total income of Rs. 4,89,910/- she is entitled to claim rebate u/s 87A of the Act. 7. We are of the considered view that Ld. CIT(A) has passed a well reasoned order as the restriction of rebate u/s 87A of the Act to the tune of Rs. 4,329/- against the claim of Rs. 24,995/- is not sustainable in the eyes of law. 8. Resultantly, the appeal filed by the Revenue is hereby dismissed. Order pronounced in the open court on 22-10-2026 .

Sd/- Sd/- (PRAKASH) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

I.T.A No. 1359/JPR/2026 Page No 4 Mahima Sahu

Jaipur Dated:- 22/10/2026. *Santosh. Copy of the order forwarded to: 1. The Appellant- 2. The Respondent- 3. CIT 4. CIT(A) 5. DR, ITAT, Jaipur. 6. Guard File By order,

Asst. Registrar

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