• Notification Date: 27-03-2024
• Notification No: N/A

CBDT allows IT Dept to File Appeals, Irrespective of Monetary Threshold

The Central Board of Direct Taxes (CBDT) has said the Income Tax department can file appeals irrespective of monetary threshold in cases relating to TDS/TCS, undisclosed foreign income, or information received from investigating agencies like ED and GST Intelligence.

As per the present rules, tax authorities are allowed to file appeals before the ITAT, High Court and Supreme Court, if the disputed tax demand exceeds Rs 50 lakh, Rs 1 crore and Rs 2 crore, respectively. These thresholds were fixed in 2019.

In a circular issued on March 15, the CBDT said that the monetary limits would not be applicable for filing appeals in cases where the prosecution has been filed by the department in the relevant case, and trial is pending and conviction order has been passed and the same has not been compounded.

Cases where the assessment is based on information with regard to an offence alleged to have been committed under any other law and information received from law enforcement or intelligence agencies, like CBI, ED, DRI, SFIO, NIA, NCB, Directorate General of GST Intelligence (DGGI), and state law enforcement agencies, in such cases the appeals would be filed irrespective of the tax demand on the assessee.

The threshold would not apply to litigation arising out of disputes relating to TDS/TCS in domestic and international taxation, or disputes relating to the applicability of provisions of the Double Taxation Avoidance Agreement.

"Filing of appeals in such cases is to be decided on the merits of the case. The officers concerned should keep in mind the overall objective of reducing unnecessary litigation and providing certainty to taxpayers on their I-T assessments while taking a decision regarding filing an appeal," the CBDT said.

Taxmen would also have to file appeals irrespective of the tax demand in dispute in cases of undisclosed foreign income /assets/bank accounts.

About 2.7 crore direct tax demands totalling about Rs 35 lakh crore are being disputed at various foras.

The CBDT also stated that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed by the CBDT.

Amit Maheshwari, AKM Global, Tax Partner, said the new circular has consolidated various earlier circulars on the issue of monetary limits for filing of appeals.

"CBDT has broadened the scope of exceptions which are now outside the scope of monetary threshold and on which department may file the appeals / SLP irrespective of the amount involved. Such exceptions although seem to be reasonable will add to the volume of appeals filed by the department in future," Maheshwari said.

Sandeep Jhunjhunwala, Nangia Andersen LLP Partner, said the circular magnifies the exception list -- cases where appeals can be pursued by the Revenue (Department) despite not meeting the prescribed monetary thresholds. One such addition to the exception list that may merit a mention is litigations related to TDS/ TCS matters where liability to deduct TDS/ TCS having regard to the nature of the transaction is in dispute or where the applicability of tax treaties is disputed.