TaxTMI 
TaxTMI 
TaxTMI 
Monetary Limits of Filing of Appeals by Income-tax Authorities : Clause 373 of the Income Tax Bill, 2025 Vs. Section 268A of the Income-tax Act, 1961
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....clarity regarding the consequences of not filing appeals in certain cases. This commentary provides a detailed analysis of Clause 373, elucidates its objectives, interprets its key provisions, and compares it meticulously with Section 268A. The discussion also explores the practical implications for stakeholders and highlights areas of continuity and change in the transition from the 1961 Act to the proposed 2025 regime. Objective and Purpose The primary objective of both Clause 373 and Section 268A is to empower the Central Board of Direct Taxes (CBDT) to regulate the filing of appeals by income-tax authorities. This is achieved by allowing the Board to set monetary thresholds or other criteria, thereby preventing the filing of appeals i....
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....d standard-setting with the CBDT. The phrase "from time to time" indicates that the Board may revise these limits or criteria as circumstances change, such as inflation, changes in tax rates, or policy shifts. * Ambiguities: The clause does not specify the methodology for determining monetary limits, leaving it entirely to the Board's discretion. However, this flexibility is necessary, given the dynamic nature of tax administration. * Sub-section (2): Non-filing of Appeal Not a Bar in Other Cases This sub-section provides that where an income-tax authority has not filed any appeal on any issue in the case of an assessee for any tax year, pursuant to the Board's orders, it does not preclude the authority from filing an appeal o....
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....axpayers in unrelated cases. * Sub-section (4): Tribunal or Court to Have Regard to Board's Orders This sub-section mandates that the Appellate Tribunal or Court, while hearing such appeals, shall have regard to the Board's orders, instructions, or directions and the circumstances under which the appeal was filed or not filed. * Interpretation: This ensures judicial awareness of the policy framework within which the department operates. It also serves as a safeguard against adverse inferences being drawn solely on the ground of selective filing of appeals. * Ambiguities: The phrase "have regard to" is broad and leaves it to judicial discretion as to how much weight to accord to the Board's instructions in individual case....
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....The only difference is the reference to "tax year" in Clause 373 versus "assessment year" in Section 268A, reflecting the proposed change in terminology in the new tax code. * No Acquiescence by Non-filing * Both provisions explicitly bar the assessee from claiming that the department has acquiesced in a decision merely because no appeal was filed. * This is a direct response to judicial pronouncements where taxpayers have attempted to invoke the doctrine of estoppel against the revenue. * Appellate Tribunal or Court to Have Regard to Board's Instructions * Both provisions require appellate forums to consider the Board's instructions and the circumstances of filing or non-filing of appeals. * This ensures a holistic appr....
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.... rely on judicial precedents on the merits of the issue, irrespective of the department's litigation policy. * For Appellate Forums: * Tribunals and Courts are required to consider the Board's instructions and the factual context of each case, promoting a nuanced approach to adjudication. * This may also reduce the incidence of conflicting decisions arising from inconsistent departmental litigation practices. * On Compliance and Litigation: * The provisions encourage transparency and predictability in departmental litigation, which can lead to more informed compliance by taxpayers. * They also contribute to reducing the volume of tax litigation, which is a persistent challenge in the Indian judicial system. Potential Is....