Tax Rebate u/s 87A Denied Due to Omission in Original Return: ITAT Allows Rebate Claimed through Revised Return [Read Order]
The Tribunal allowed a tax rebate of Rs. 21,350 under Section 87A of the Income Tax Act, 1961, and overturned the Commissioner of Income Tax (Appeals)’s order, as the assessee’s failure to claim the rebate in the original return constituted an error or omission which justified revised return.
ITAT
ITAT
The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) set aside the Commissioner of Income Tax (Appeals) [CIT(A)] which denied rebate claim under section 87A due to the omission in Original Return and allowed Tax Rebate which was claimed through Revised Return.
Thejaswini Jakkaraju (assessee) filed original return of income for AY 2024-25 on 22/06/2024, which was processed without any adjustments. Subsequently, on 11/07/2024, the assessee filed a revised return claiming a rebate of Rs. 21,350 under Section 87A. The revised return was processed on 24/09/2024 by the Central Processing Centre (CPC) but the rebate was denied.
Want a deeper insight into the Income Tax Bill, 2025? Click here
Aggrieved by the denial, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) dismissed the appeal, held that switching from the new tax regime to the old tax regime did not constitute an error or omission, and thus, the revised return was invalid.
Aggrieved by the CIT(A)’s order, the assessee appealed to the ITAT. The counsel for the assessee, argued that the failure to claim the rebate under Section 87A in the original return was an error or omission, justifying the revised return.
The Counsel further contended that the rebate under Section 87A is available under both tax regimes, as per Section 115 BAC, and that Section 143(1)(a) does not permit adjustments for such rebates.
The single-member bench comprising Prashant Maharishi (Vice President), observed that the assessee’s failure to claim the rebate under Section 87A in the original return constituted an error or omission.
How to Audit Public Charitable Trusts under the Income Tax Act Click Here
The bench relied on the Bombay High Court’s decision in Chamber of Tax Consultant v. DGIT (System), which affirmed the eligibility for the Section 87A rebate. The Tribunal set aside the CIT(A)’s order.
The Bench directed the Assessing Officer (AO) to allow the rebate of Rs. 21,350 under Section 87A, as claimed in the revised return. The appeal filed by the assessee was allowed.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
