Return can be revised u/s 139(5) to claim rebate u/s 87A not claimed in original return

Return can be revised under section 139(5) to claim rebate u/s 87A not claimed in original return due to error and omission.

In a recent judgment, ITAT Bengaluru has held revision of return of income u/s 139(5) was valid as there was error and omission in the original return of income of not claiming rebate u/s 87A of Income Tax Act, 1961 (the Act).

ABCAUS Case Law Citation:
4623 (2025) (07) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the denial of rebate u/s 87A claimed in the revised return.

The appellant assessee filed original return of income which was processed by CPC under section 143(1) of the Act at the same income without any adjustment.  Subsequently, assessee revised its return of income under the provisions of section 139(5) to claim rebate u/s 87A which was omitted in the original return.

However, CPC, Bangalore while processing the revised return denied the rebate.  Aggrieved with the same, assessee preferred before the CIT(A) who held that assessee had revised return of income.  The revision of return of income is available only when an error or omission in the original return is found.  The assessee opted from the new tax regime to old tax regime which is not an error or an omission which would have allowed the assessee to file revised return and therefore revised return cannot be filed. Accordingly, the appeal of the assessee was dismissed.  

Before the Tribunal, the assessee submitted that he had failed to claim tax rebate under the provisions of section 87A which is an error and omission in the original return of income and therefore revision of return was proper.  He further submitted that even in the new regime or old regime, there is no difference in the claim of rebate u/s. 87A of the Act. 

Referring to the provisions of section 115BAC the assessee submitted that relief u/s. 87A is available in both the regimes and therefore rejection of return of income of the assessee claiming such rebate was not proper. He further submitted that the provisions of section 143(1)(a) also do not refer to the adjustment on account of relief u/s 87A of the Act. 

The Tribunal observed that CIT(A) had placed reliance on the judgment of the Hon’ble Supreme Court that revised return cannot be filed to convert the original return into loss return in the absence of any omission or mistake.

The Tribunal opined that the said judgment did not apply to the facts of the present case for the reason that there was error and omission in the original return of income of not claiming rebate u/s 87A of the Act.

The Tribunal noted that the issue was covered by the decision of the Bombay High Court wherein the claim u/s 87A was allowed. 

The Tribunal held that in view of the decision of the Bombay High Court, assessee was entitled to rebate u/s. 87A of the Act as per revised return.

Accordingly, AO was directed to allow rebate u/s 87A to the assessee.

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