Monetary limit for appeal by IT dept in income tax litigation hiked in ITAT, high courts and Supreme Court

There has been a substantial increase in limits to trigger appeal by IT dept. It’s Rs 50 lakh at ITAT level, Rs 1 cr at high courts and Rs 2 crore Supreme Court

Staff Writer Aug 10, 2019

Income tax department appealsIn a move to reduce tax litigation and to give relief to tax payers, the Central Board of Direct Taxes (CBDT) has now at least doubled the threshold for filing appeals in tax disputes.

It is well-known that the tax department, under pressure to achieve tough targets, slaps demands on tax payees and then both entities get into long legal processes to prove who is right or wrong. Even after getting unfavourable verdicts, the IT department pursues the case from the tribunal stage to the High Courts and even in the Supreme Court. With a higher threshold for filing appeals, now one can hope that there will lower number of such appeals.

The biggest problems of the tax disputes is the time involved, and the amount of money spent on lawyers. This helps nobody because significant resources are wasted while pursuing the resolution of disputes. There is a substantial pendency of appeals of the Income Tax Department before various appellate fora.

The CBDT is aware of the importance of litigation management and has been continuously working towards achieving the same, says CBDT, the apex body for direct taxes in India.

The difference between the tax on the total income assessed by the IT department, and the tax without considering the income relating to disputed issues is called a tax effect.

The monetary limit for an appeal before the Income Tax Appellate Tribunal (ITAT) has been increased to Rs 50 lakh from Rs 20 lakh earlier.

In case of appeals before High Courts, the monetary limit for an appeal has been doubled to Rs 1 crore.

In case of appeals before the Supreme Court, the revised limit for filing appeal has been raised to Rs 2 crore from Rs 1 crore.

Income tax appeals

“This will further reduce time, effort and resources presently deployed in litigation to focus on issues involving litigation of substantial value,” CBDT said in a statement.

One can expect with the CBDT move, that there will be lower number of appeals getting filed.

Before August 8, 2019, the monetary limits for filing of appeals by the IT Department were last revised on 11th July, 2018 vide CBDT Circular No.3 of 2018.

You can read the latest CBDT communique here

Disclaimer – RupeeIQ, owned by Lime Internet Pvt Ltd, does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any step.

Staff Writer

This article is written by RupeeIQ editorial staff.

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Mohammed Haseeb