SRI SANTOSH SALAMPURIA,BANKURA V. I.T.O. WARD-3(1), BANKURA

ITA 2271/KOL/2025

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This case involves an appeal by Sri Santosh Salampuria against an intimation issued under section 143(1) of the Income Tax Act, which denied a rebate on short-term capital gains under section 87A. The assessee argued that the intimation was erroneous as the rebate should be allowed despite the inclusion of short-term capital gains in the income, given that the total income did not exceed Rs. 7 lakhs. The tribunal referenced a decision from a coordinate bench in the case of Jayshreeben Jayantibhai Palsana, which supported the assessee's position. The tribunal found that the CPC's denial of the rebate was based on system-driven logic rather than statutory mandate, leading to the quashing of the intimation.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828442 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Kolkata
• Assessment Year: misc
• Appeal Filed On: 08-10-2025
• Other Referred Cases: Jayshreeben Jayantibhai Palsana vs. ITA No.1014/Ahd/2025, The Chamber of Tax Consultants vs. Director General of Income Tax (Systems), Avni Milanbhai Maniya vs. CIT(A)-1, Nagpur, Beena Manishbhai Fofaria vs. A.Y. 2024-25
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEES WHO HAD OPTED; ABHIJIT ADHIKARY
• Assessee Lawyers: VINAY KUMAR GUPTA
• Keywords: Capital Gains

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.2271/KOL/2025 (नििाारण वर्ा / Assessment Year :2024-2025) Sri Santosh Salampuria, Rashtola, PO & Dist : Bankura, West Bengal-722102 Vs ITO Ward-3(1), Bankura PAN No. :ATFPS 0888 J (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Vinay Kumar Gupta, AR राजस्व की ओर से /Revenue by : Shri Abhijit Adhikary, Sr. DR सुनवाई की तारीख / Date of Hearing : 13/01/2026 घोषणा की तारीख/Date of Pronouncement : 13/01/2026 आदेश / O R D E R This is an appeal filed by the assessee against the order dated 31.07.2025, passed by the ld.Addl/CIT(A)-5, Mumbai, for the assessment year 2024-2025. 2. It was submitted by the Ld.AR that the appeal of the assessee is time barred by 08 days on account of which the assessee has filed necessary affidavit mentioning that the delay was on account of festival of Durga Puja the office of tax consultant was closed from 20.09.2025 to 06.09.2025. As the delay is on account of the fault of the tax consultant and the assessee has filed the affidavit and the concerned tax consultant also accepted the failure, the delay in filing the appeal stands condoned. 3. It was submitted by the ld. AR that the return filed by the assessee came to be processed and an intimation came to be issued u/s.143(1) of the Act, wherein the assessee’s claim of rebate in respect of short term capital gain u/s.87A of the Act has been denied. It was the submission that Printed from counselvise.com ITA No.2271/Kol/2025 2 such adjustment could not be made in an intimation u/s.143(1) of the Act for which he relied upon the decision of the coordinate bench of the Tribunal in the case of Jayshreeben Jayantibhai Palsana, passed in ITA No.1014/Ahd/2025, vide order dated 12.08.2025, wherein the coordinate bench of the Tribunal has under similar circumstances, held in para 5.15 to 5.18 as follows :- 5.15 In the recent judgment dated 24.01.2025 in the case of The Chamber of Tax Consultants vs. Director General of Income Tax (Systems) [TS-5026-HC-2025 (Bombay)-O], the Hon'ble Bombay High Court considered the issue of system-based denial of 87A rebate on STCG under section 111A for assessees who had opted for 115BAC(1A). While the Hon'ble Court refrained from interpreting the substantive provisions, it held that the assessee must be allowed to claim rebate under section 87A, and it is for the quasi-judicial authority to decide on merits. Thus, the Hon'ble High Court clearly held that the CPC utility or system configuration cannot override statutory rights, and that each case must be adjudicated on its own merits. We at the Tribunal, being such a quasi-judicial authority, are therefore duty-bound to examine the claim in light of the statutory framework and not be influenced by automated denial or procedural logic adopted by the CPC. 5.16 The assessee has also relied on an appellate order dated 27.05.2025 passed by CIT(A)-1, Nagpur in the case of Avni Milanbhai Maniya, wherein on identical facts the CIT(A) allowed the claim of rebate under section 87A in respect of STCG taxable under section 111A. We also note that such decision was taken by the JCIT/Addl. CIT(A) relying on the decision of Beena Manishbhai Fofaria for the A.Y. 2024-25. While not binding, the said appellate order affirms that divergent views exist and such benefit has been allowed in similar factual circumstances. 5.17 In view of the above discussion, we find that the assessee is a resident individual and the total income declared for the assessment year 2024-25 does not exceed Rs.7,00,000. It is also an admitted position that the assessee has exercised the option to be assessed under the new tax regime in accordance with the provisions of section 115BAC (1A) of the Act. On a plain reading of the statutory provisions, there exists no express bar either in section 87A or section 111A for denial of rebate in respect of tax payable on short- term capital gains arising from transfer of listed equity shares taxable at special rates under section 111A. The legislative intent is further clarified by the subsequent amendment proposed in the Finance Bill, 2025, which is prospective in nature and thereby reinforces that no Printed from counselvise.com ITA No.2271/Kol/2025 3 such restriction was in force during the relevant assessment year. The denial of rebate under section 87A by the CPC, Bengaluru, appears to be based solely on system-driven logic and not on any statutory mandate. Moreover, the interpretation adopted by the CIT(A) in upholding such denial is, in our considered view, not in consonance with the plain and unambiguous language of the law as applicable for A.Y. 2024-25. 5.18 Accordingly, we hold that the assessee is eligible for rebate under section 87A for A.Y. 2024-25 even though the income includes STCG taxable under section 111A. The Assessing Officer is directed to allow rebate of Rs.13,320/- and recompute tax liability accordingly. The demand of Rs.15,820/- raised in CPC intimation stands deleted. Refund, if any, shall be granted in accordance with law. 4. It was the submission that the intimation being erroneous, insofar as the rebate u/s.87A of the Act cannot be denied in the intimation, especially when the total income of the assessee during the impugned assessment year, does not exceed Rs.7 lakhs, the intimation is liable to be quashed. 5. In reply, ld. Sr. DR supported the orders of the CPC and ld.CIT(A) 6. I have considered the rival submissions. On merits it is noticed that the issues is squarely covered by the decision of the coordinate bench of the Tribunal in the case of Jayshreeben Jayantibhai Palsana, referred to supra, wherein the Tribunal has categorically held that the adjustment in respect of rebate u/s.87A of the Act for the assessment year 2024-2025 even though the income includes the short term capital gain is not permissible in an intimation u/s.143(1). Respectfully following the decision of the Tribunal in the above case, the intimation as issued by the CPC is found to be erroneous and consequently the same stands quashed. Printed from counselvise.com ITA No.2271/Kol/2025 4 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 13/01/2026. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 13/01/2026 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// Printed from counselvise.com "