The Central Board of Direct Taxes (CBDT) has issued a Circular revising the monetary limits for filing of appeals by the Department with the objective of reducing litigation as a part of its initiatives to reduce grievances of the taxpayers.

The monetary limits for filing of appeals by the Department before the Income Tax Appellate Tribunal and the High Courts have been revised to tax effect of ₹ 10 Lakhs and ₹ 20 Lakhs, respectively, from the present limits of tax effect of ₹ 4 Lakhs and ₹ 10 Lakhs. The revised limits have been made applicable retrospectively to pending appeals also.  Directions have been issued that pending appeals which are below the revised monetary limits may be withdrawn or not pressed.

In another noteworthy decision, the CBDT has issued an Office Memorandum   directing Principal Chief Commissioners to constitute a collegium of Chief Commissioners of Income Tax comprising of two officers in their respective Regions. This collegium will consider withdrawal of appeals filed by the Department in cases involving tax effect above the revised monetary limit from the High Court(s) if no question of law is involved, the issue is considered settled by the Department or the appeal is no longer relevant in view of subsequent amendment.

These two decisions are expected to reduce pending litigation filed by the Department by 50 percent and provide relief to taxpayers facing long standing litigation.

Circular No.21/2015 and  O.M.  bearing F.no.279/Misc/52/2014-(ITJ) are available on the website of the Department www.incometaxindia.gov.in .

Appeal filing thresholds raised, enabling withdrawal of lower-value departmental appeals and collegium review of higher-value cases. Revised monetary limits for departmental appeals increase the thresholds for instituting appeals and are made retrospective to pending matters; pending appeals below the new thresholds may be withdrawn or not pressed. A regional collegium of two senior officers is mandated to consider withdrawal of departmental appeals above the revised thresholds where no question of law is involved, the issue is settled by the Department, or subsequent amendment makes the appeal irrelevant.