ITAT Bangalore: Rebate u/s 87A Can Be Claimed Through Revised Return; Denial by CPC Invalid

The present appeal (ITA No.218/Bang/2025) has been filed by Thejaswini Jakkaraju (appellant) in the Income Tax Appellate Tribunal (ITAT) Bangalore against the appellate order dated 24.12.2024, passed by the Addl.CIT(Appeals)-1, Jaipur [ld. CIT(A)] (respondent). That decision had dismissed her earlier appeal against an order passed under Section 143(1) of the Income Tax Act by the Central Processing Centre (CPC) in Bangalore on September 24, 2024.

Background of Case

The appellant (Thejaswini Jakkaraju) filed her initial Income Tax Return (ITR) on June 22, 2024. The return was processed on June 30, 2024, and income was successfully declared. Later, a revised return was filed on July 11, 2024, claiming a rebate of Rs. 21,350 under Section 87A. However, the rebate was denied when the revised return was processed on September 24, 2024. So, challenging the decision, she filed an appeal to the Commissioner of Income Tax (Appeals); however, the appeal was rejected.

Delay in Appeal Filing:

The appeal was filed one month late to the Commissioner of Income Tax (Appeals). FRs. reason for the delay, she said that she had earlier filed a rectification request under Section 154, but it was not resolved, so she had to file the appeal. The delay was condoned.

CIT(A)’s Reason for Rejection:

For the rejection of the rebate, the Commissioner of Income Tax (Appeals) gave the reason that switching from the new tax regime to the old regime is not a valid reason to file a revised return. Therefore, it ruled that the revised return was invalid.

Arguments by Taxpayer’s Lawyer:

On this point, the lawyer of the appellant said that not claiming the rebate under Section 87A in the initial return was a mistake, and revising the return was proper. Also, the rebate under Section 87A is available under both the old and new tax regimes, so changing regimes does not matter in this case. Therefore, the tax department has no right to deny the rebate via the summary processing of returns under Section 143(1), as per the law.

Tribunal’s Decision:

When the Income Tax Appellate Tribunal (ITAT) Bangalore analysed the complete case, it endorsed the point made by the appellant. It held that failing to claim the rebate in the original return was indeed an error, which justified filing a revised return. To announce its decision, the tribunal also took reference from an earlier judgement of the Bombay High Court titled Chamber of Tax Consultants v. DGIT, which supported the taxpayer’s position. Therefore, the Tribunal directed the tax officer to allow the rebate of Rs. 21,350 under Section 87A.