The Bombay High Court has disposed of the Public Interest Litigation (PIL) pertaining to the eligibility of rebate under Section 87A of the Income Tax Act, 1961.
The bench of Justice M. S. Sonak and Justice Jitendra Jain on admissibility of rebate under section 87A has observed that the issue of adjudication of eligibility of a claim under Section 87A is left to the authorities under the Income Tax Act while processing the returns filed by the assessees.
The petitioner, Chamber of Tax Consultants filed the Public Interest Litigation (PIL) against the respondents through its President and taxpayer assessees. The petitioner is a society registered under the Societies Registration Act of 1860 and the Bombay Public Trusts Act of 1950. It has more than 3800 members of Advocates, Chartered Accountants, and tax practitioners.
The cause for filing the present PIL arose on 5 July 2024. On that date, online utility provided by the respondent/department denied the assessees the benefit of claiming a rebate under Section 87A of the Income-tax Act for the assessment year 2024-25 while filing online return against tax computed under various sections of Chapter XII of the Act. Before 5 July 2024, the respondents’ utility permitted the assessees to make such a claim.
Chamber of Tax Consultants various other associations made various representations to respondents on the issue of utility not providing for making a claim under Section 87A but, having failed to get justice, have approached the Court for redressal of their grievances.
The issue raised was whether the department are justified in modifying their utility, whereby an assessee is debarred at the threshold from making a rebate claim under Section 87A while uploading his return of income online.
The bench opined that the department cannot restrain or prohibit an assessee from claiming Section 87A by modifying their utility by which an assessee is forbidden at the threshold itself from making such a claim. Certainly, such a claim, whether eligible or not, can be examined in the proceedings under Section 143(1), Section 143(3), etc.
The court stated that merely because many returns are required to be processed and only a few of them are selected for scrutiny, it cannot be grounds to prohibit an assessee from making a debatable and arguable claim. In any event, considering the mandates of Articles 265 and 300A, ends, howsoever laudable, cannot justify means.
The court stated that if any claim is made, the department would certainly be free to examine the same as per the provisions of the Act. Both the department and the assessee have remedies under the Act for testing the validity of a claim.
“We, however, refrain from expressing any views on whether the submissions made by the learned senior counsel for the petitioners or the learned ASG are correct since that would be something which has to be examined by the quasi-judicial authorities under the Act in the first instance and not by a writ court in its exercise of extraordinary jurisdiction,” the bench added while disposing of the PIL.
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Case Details
Case Title: The Chamber of Tax Consultants Versus Director General of Income
Tax (systems)
Case No.: PUBLIC INTEREST LITIGATION (L) NO.32465 OF 2024
Date: 24 January 2025
Counsel For Petitioner: Percy J Pardiwala, Senior Advocate a/w Mr. Dharan V. Gandhi
Counsel For Respondent: N Venkatraman ASG (through VC) a/w Mr. Akhileshwar Sharma a/w Mr Abhishek Mishra
