Subscribe To Our Free Newsletter:

CBDT Enhances Monetary Limits For Filing Appeals By The Dept &Gives It Retrospective Effect

The CBDT has, as a measure for reducing litigation, issued Circular 21/2015 dated 10.12.2015 increasing the monetary limits for filing of appeals by the department before the ITAT and High Courts and SLP before the Supreme Court. The notable aspect is that the CBDT has directed that the said instruction shall apply retrospectively to pending appeals and that all appeals below the specified tax limits should be withdrawn/ not pressed. However, appeals before the Supreme Court are to be governed by the limits operative at the time that the appeal was filed.


Circular No. 21/2015

F No 279/Misc. 142/2007-ITJ (Pt)

Government of India
Ministry of Finance
Department of Revenue
Central Board Direct Taxes

New Delhi the 10th December, 2015

Subject: Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal and High Courts and SLP before Supreme Court –measures for reducing litigation –Reg –

Reference is invited to Board’s instruction No 5/2014 dated 10.07.2014 wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Appellate Tribunal and High Courts and SLP before the Supreme Court were specified.

2. In supersession of the above instruction, it has been decided by the Board that departmental appeals may be filed on merits before Appellate Tribunal and High Courts and SLP before the Supreme Court keeping in view the monetary limits and conditions specified below.

3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: –

S NoAppeals in Income-tax mattersMonetary Limit (in Rs)
1.Before Appellate Tribunal10,00,000/-
2. Before High Court20,00,000/-
3.Before Supreme Court25,00,000/-

It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.

4. For this purpose, “tax effect”means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as “disputed issues”). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. lf, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all such assessment years even if the ‘tax effect’is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which ‘tax effect’exceeds the monetary limit prescribed. In case where a composite order/ judgement involves more than one assessee, each assessee shall be dealt with separately.

6. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified above, the Commissioner of Income-tax shall specifically record that “even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this instruction”. Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the disputed issues. The Income-tax Department shall not be precluded from filing an appeal against the disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits.

7. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department has implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other assessment year or in the case of any other assessee for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not filed or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value. As the evidence of not filing appeal due to this instruction may have to be produced in courts, the judicial folders in the office of CsIT must be maintained in a systemic manner for easy retrieval.

8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect:

(a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or
(b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or
(c) Where Revenue Audit objection in the case has been accepted by the Department, or
(d) Where the addition relates to undisclosed foreign assets/ bank accounts.

9. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute &rules. Further, filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12 A of the IT Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case.

10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/ Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.

11. This issues under Section 268A (1) of the Income-tax Act 1961.

(D.S. Chaudhry)
CIT (A&J), CBDT,
New Delhi
Copy to:
1.The Chairman, Members and all other officers in CBDT of the rank of Under Secretary and above.
2.All Pr. Chief Commissioners of Income Tax and All Directors General of Income Tax with a request to bring to the attention of all officers.
3.ADG (PR,PP &OL), Mayur Bhawan, New Delhi for printing in the quarterly Tax Bulletin and for circulation as per usual mailing list.
4.The Comptroller and Auditor General of India
5.ADG (Vigilance), Mayur Bhawan, New Delhi
6.The joint Secretary &Legal Advisor, Ministry of Law &Justice, New Delhi
7.All Directorates of Income-tax, New Delhi and DGIT(NADT), Nagpur
8.ITCC (3 copies)
9.The ADG(Systems)-4, for uploading on the Department’s website
l 0. Data Base Cell for uploading on irsofficersonline.gov.in
11.Hindi Cell for translation
12.Guard file.

(D.S. Chaudhry)
CIT (A&J), CBDT,
New Delhi


16 comments on “CBDT Enhances Monetary Limits For Filing Appeals By The Dept &Gives It Retrospective Effect
  1. dn khanna says:

    A right step of CBDT is appreciated.
    Suggest to give similar instructions for Sec263, and re-opening u/s 147/148 also.
    Also suggest that the FM should make announcement in his next budget speech
    “Scrutny Holiday”for specified assessees for specified income declared in the return so that DEPARTMENTAL OFFICERS may engage in increasing the number of new asseese to enhance the no of assessees.

  2. V N KULKARNI says:

    WE ARE MOVING TOWARDS EFFICIENT TAX SYSTEM.WELCOME MOVE.

  3. ca r.k.aGARWAL says:

    It is the right step in the direction of reducing the litigation and it will reduce the burden on the courts also and will give the relief to the small assessee at large. Congratulation to the CBDT and FM for taking the action in the public interest.

  4. Bobjee kurien says:

    Microsoft Windows 10 offered a free download to all who had windows8.1.This offer was made a few months back.Those who were keen on the upgrade downloaded but soon realised that there were glitches in the new version.They were allowed to get back to the installed version in a month’s time.
    If one looks dispassionately at the appeals filed relate to the changes made in the finance act.In the process of appeal the issues are thread here discussedin appeal and in technical grounds the appeals are allowed.The result is that the assessee is unnessarily harrassed.Why not introduce a change in the act which comes to effect at a future date and people get to know the impactof the changes.That will ensure fewer appeals.After all the citizens have a right to know the effect of the change.This is a free country and transparency goes a long way when citizens comply with law.

  5. Rajesh Bhardwaj says:

    Sir, CBDT has to be complimented for making the monetary limits retrospectively applicable as it will go a long way to reduce litigation in courts.

  6. Varaprasad Daitha says:

    One of the officials who was present in the chambers of some CIT (A) said to me that on the evening of 11-12-2015 that he overheard the conversation between two CIT (A) which is as follows:
    One CIT (A): With the issued of instructions by the CBDT regarding raising monetary limits will result in eroding the reduction of the powers of Pr. CITs who at present hold the assignment of regular charges.

    Second CIT (A): But this is a boon for CIT (A) who have a good bargaining power with the assessees / authorized representatives up to Rs. 10 lakhs tax effect.

    If this conversation was true (I do not vouch for sure) the attitude of such CITs (A) is much deplorable.

  7. Narendra Kedia ,Advocate says:

    A most crucial steps have taken by CBDT in reducing unnecessary departmental appeals. This one approach they can use to change the pendency of cases at different level. Many thanks for analytical efforts.

    • Bobjee kurien says:

      Perhaps one of the few occasions that the Board to a pro citizen stance and issued direction which is some thing which is not heard.They have realised that they are not collecting tax for a king or a queen but are building confidence in the citizens to be tax compliant.Hats off for the change of heart at the highest level of tax India which has shown its humane face.

  8. Narayan Jain says:

    The Hon’ble FM and CBDT have taken a step in right direction. On behalf of PR Committee of All india Federation of Tax Practitioners I thanks the Finance Ministry. The new limits will certainly help reducing litigation. It will be appreciated that on small matters taxpayers should also not tend to prefer appeals. Narayan Jain
    Email npjain@vsnl.com

  9. Bobjee Kurien says:

    For once CBDT has acted in time and not wait . Congratulations . I hope the CBDT keeps its ears to the ground and takes action the moment it is required

  10. Varaprasad Daitha says:

    The fruits of appointment of one CIT exclusively for A &J in CBDT started yielding results. Let us hope other officers of CBDT will act positively in other assignments.

  11. Nem Singh says:

    CBDT decision is most welcome-able and in the interest of business organisation to reduce the litigation on small dispute by increasing the monetary limits for filing of appeals by the department before the authorities/courts if the tax effect is:

    (i) The ITAT Rs.10,00,000/-
    (ii) The High Courts Rs.20,00,000/-
    (iii) SLP before the Supreme Court Rs.25,00,000/-

    The most important thing is that this decision have retrospectively effect ie appeal filed by the department before the authorities shall be with withdrawn/not pressed.

7 Pings/Trackbacks for "CBDT Enhances Monetary Limits For Filing Appeals By The Dept &Gives It Retrospective Effect"
  1. […] counsel for the respondents relied upon circular dated 10th December, 2015 and specifically relied upon paragraph […]

  2. […] into the merits of the case by relying on the definition of ‘tax effect’as defined in Circular No. 21/2015 dated 10.12.2015, which prescribes the monetary limit for filing appeals before various appellate authorities. In […]

  3. […] CBDT has issued Circular No. 5/2017 dated 23.01.2017 in which it has clarified the impact of Circular No. 21/2015 dated 10.12.2015 and Circular No. 8/2016 with regard to the non-filing of appeals by the department in cases where […]

  4. […] CBDT has issued a letter dated 08.03.2016 in which it has clarified that the benefit of Circular 21 of 2015 dated 10.12.2015 by which the monetary limits for filing appeals before the Income Tax Appellate Tribunals and High […]

  5. […] ITAT has complimented the CBDT for issuing Circular No. 21/ 2015 dated 10th December 2015 and stating therein that all pending appeals of the department with a monetary limit not exceeding […]

  6. […] ITAT has complimented the CBDT for issuing Circular No. 21/ 2015 dated 10th December 2015 and stating therein that all pending appeals of the department with a monetary limit not exceeding […]

  7. […] a view to implement Circular No. 21/2015 dated 10th December 2015 issued by the CBDT (which states that even pending appeals of the department with a monetary tax […]

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Top