ANKIT AGARWAL,KANPUR vs. KNP-W-(51)(1), KANPUR

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ITA 898/LKW/2025Status: DisposedITAT Lucknow15 October 2026AY 2024-253 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the assessee did not appear for the hearing despite multiple opportunities. It was inferred that the assessee was not interested in effectively prosecuting the appeal. The Learned Departmental Representative for the Revenue supported the orders of the lower authorities. The Tribunal, having heard the Ld. DR and perused the record, concluded that there was no representation from the assessee despite repeated opportunities, leading to the presumption that the assessee was not interested in prosecuting the appeal. Consequently, the appeal was dismissed for want of prosecution. The Tribunal clarified that the assessee could approach for recalling the order upon demonstrating sufficient cause for non-appearance. No decision was made on the merits of the grounds raised by the assessee.

What were the facts?

The assessee, Ankit Agarwal, filed an appeal against the order of the Learned Addl/Joint Commissioner of Income-tax (Appeals), Patna, dated 09.10.2025, for the assessment year 2024-25. The appeal was registered on 12.12.2025. Despite multiple opportunities, no one appeared on behalf of the assessee during the hearing dates. The Revenue, represented by Dr. Preeti Singh, Addl. CIT (DR), supported the orders of the lower authorities, stating that in the absence of relevant evidence, their findings do not warrant interference. The Tribunal noted that the assessee appeared to be not interested in prosecuting the appeal.

What were the issues?

1. Whether the Learned CIT(A) erred in denying the benefit of rebate under Section 87A on short-term capital gains (STCG) taxed under Section 111A, when the Legislature had only expressly restricted such rebate for long-term capital gains (LTCG) under Section 112A(6), implying legislative intent to allow rebate on STCG (Assessee). The Revenue's contentions are not recorded as they supported the lower authorities' orders without specific arguments on this point. 2. Whether the CIT(A) wrongly interpreted the 'subject to' clause in Section 115BAC(1A) as restricting rebate eligibility under Chapter VIII, when it only governs the computation mechanism for tax on special income (Assessee). The Revenue's contentions are not recorded. 3. Whether the CIT(A) failed to appreciate that Section 87A applies to tax computed on total income as defined in Section 2(45), which includes all income heads like STCG, without any statutory carve-out (Assessee). The Revenue's contentions are not recorded. 4. Whether the CIT(A)'s reliance on CBDT Circular 13/2025 was misplaced, as circulars are administrative instructions and do not override substantive law or judicial interpretation (Assessee). The Revenue's contentions are not recorded. 5. Whether the denial of rebate was based on a strained interpretation, as the proviso to Section 87A provides for rebate where total income does not exceed 7 lakh, without excluding STCG (Assessee). The Revenue's contentions are not recorded. 6. Whether the Finance Bill 2025's proposed restriction on 87A rebate for special income from AY 2026-27 implies no such restriction existed for AY 2024-25, and the CIT(A) erred in applying a future amendment (Assessee). The Revenue's contentions are not recorded. 7. Whether the denial of rebate was a system-driven error contrary to legal position, as system-generated denials contradicting law have been struck down by the Bombay High Court (Assessee). The Revenue's contentions are not recorded.

Which sections of the Income-tax Act were involved?

Section 87A,Section 111A,Section 112A,Section 115BAC,Section 2(45)

AI-generated summary — verify with the full judgment below

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

Before: SHRI KUL BHARAT

For Respondent: Dr. Preeti Singh, Addl. CIT (DR)

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee, is directed against the order of the Learned Addl/Joint Commissioner of Income-tax (Appeals), Patna dated 09.10.2025 pertaining to the assessment year 2024- 25. The assessee has raised the following grounds of appeal: -

“GROUND 1: Express Legislative Distinction Section 112A(6) vs. Section 111A The learned CIT(A) erred in denying the benefit of rebate u/s 87A on short term capital gains (STCG) taxed under Section 111A, despite the fact that the Legislature has only expressly restricted such rebate for long term capital gains (LTCG) under Section 112A(6). The absence of a similar restriction in Section 111A clearly establishes legislative intent to allow rebate on STCG. Denial is thus ultra vires the Act and contrary to binding ITAT precedents (Ahmedabad, Rajkot benches). GROUND 2: Subject To Clause in Section 115BAC Does Not Restrict Rebate Eligibility: The CIT(A) wrongly interpreted the subject to clause in Section 115BAC (1A). This governs only the mechanism for computation of tax on special income, not eligibility for rebates under Chapter VIII. Section 87A is neither limited nor overridden by Chapter XII provisions.

ITA No.898/LKW/2025 Page 2 of 3 GROUND 3: Total Income Includes All Income Heads No Statutory Carve Out: The CIT(A) failed to appreciate that Section 87A applies to tax computed on total income as defined in Section 2(45) of the Act, which covers all income heads including STCG. No statutory carveout exists for special category income, hence the rebate eligibility remains Intact. GROUND 4: CBDT Circular 13/2025 Cannot Override Substantive Law: Reliance by the CIT(A) on CBDT Circular 13/2025 is misplaced. Circulars are only administrative instructions and do not have the force of law or override judicial interpretation/statutory provisions. ITAT and constitutional courts have expressly rejected system driven denials where they contradict statutory language. GROUND 5: Plain Reading of Section 87A Proviso No Express Restriction: The denial of rebate is based on a strained interpretation not supported by the statutory language. The proviso to Section 87A, clearly provides for rebate where total income does not exceed 7 lakh, without any exclusion for STCG, no words in the statute restrict rebate solely to normal income. GROUND 6: Prospective Effect of Finance Act 2025 Amendment: The Finance Bill 2025 proposes a restriction on 87A rebate for special income from A.Y.2026-27, which by necessary implication proves no such restriction existed for A.Y. 2024-25, the year under appeal. The CIT(A) erred in applying a future legislative amendment to the present assessment year. GROUND 7: System Driven Denial Cannot Override Legal Position: The denial of rebate was a result of CPC system configuration and not the statutory provision or any sound legal reasoning. Bombay High Court has struck down system generated denials contrary to law and directed corrective action.” 2. At the time of hearing, no one attended the proceedings on behalf of the assessee. It is evident from the record that the multiple opportunities have been given to the assessee since filing of the appeal. It is noted that the appeal was registered with the Registry on 12.12.2025 and thereafter, various dates were fixed for hearing. However, on all occasions, there was no representation on behalf of the assessee.

3.

Under these facts, it can be inferred that the assessee is not interested in effectively prosecuting the appeal.

ITA No.898/LKW/2025 Page 3 of 3 4. On the other hand, the Ld. Departmental Representative for Revenue has supported the orders of the lower authorities and submitted that in the absence of any relevant evidence finding of the lower authority do not call for any interference. 5. I have heard the Ld. DR and perused the material available on record. There is no representation on behalf of the assessee despite repeated opportunities, therefore, it is presumed that the assessee is not interested in prosecuting the present appeal. Accordingly, the appeal is dismissed for want of prosecution. By way of abundant caution, it is clarified that the assessee shall be at liberty to approach the Income Tax Appellate Tribunal for recalling of this order, upon demonstrating “sufficient cause” for non-appearance as per law. 6. In the result, the appeal of the assessee in ITA. No.898/LKW/2025 is dismissed. Order pronounced in the open Court on 15/10/2026.

Sd/- [कुल भारत] [KUL BHARAT] उपाध्यक्ष/VICE PRESIDENT DATED: 15/10/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent Digitally signed 3. CIT VIJAY PAL by VIJAY PAL 4. DR SINGH SINGH 5. Guard File Date: 2026.10.15 15:53:50 +05'30' By order Sr. Private Secretary

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