ITAT Jaipur Ruling: CPC Lacks Jurisdiction to Deny Section 87A Rebate on STCG During Section 143(1) Processing

Introduction to the Jurisdictional Dispute

The boundaries of automated tax processing have once again come under judicial scrutiny. In a pivotal decision, the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, delivered a crucial ruling in the case of Ratika Mittal Vs ITO. The core of the dispute revolved around whether the Centralized Processing Centre (CPC) possesses the statutory authority to disallow a tax rebate claimed under Section 87A of the Income Tax Act, 1961 during the preliminary processing of returns under Section 143(1).

Specifically, the controversy arose when the CPC denied the rebate to assessees who had reported Short Term Capital Gains (STCG) taxable at a concessional rate, categorizing the claim as an impermissible "double benefit."

Factual Matrix of the Case

The tribunal simultaneously heard two separate appeals filed by different assessees for the Assessment Year 2024-25, as both cases shared an identical factual and legal framework.