Monetary Limit Increased for Tax Cases

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In order to reduce tax litigation by about 50 per cent, the Ministry of Finance raised the monetary limit for filing appeals to Rs 10 lakh in appellate tribunal, and Rs 20 lakh in High Courts.

It has been decided to withdraw appeals filed by I-T department in ITAT and High Courts for cases involving tax effect of below the new monetary limit. There are 75,000 cases pending in ITAT and HC.

current affairsThe monetary limits for filing of appeals by the Department before the Income Tax Appellate Tribunal (ITAT) and the High Courts have been revised to tax effect of Rs 10 lakhs and Rs 20 lakhs respectively, from the present limits of tax effect of Rs 4 lakhs and Rs 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 Directions have been issued that pending appeals which are below the revised monetary limits may be withdrawn or not pressed.

However, the cases involving substantive question of law would be pursued irrespective of the monetary limit.

Tax effect refers to the difference between what the I-T department’s assessment of tax liability and asssessee’s assumption.

The government and CBDT have also decided to set up a collegium of two Chief Commissioners would be set up by Principal Chief Commissioners to decide on withdrawal of appeals filed by the department.

This collegium will consider withdrawal of appeals filed by the Department in cases involving tax effect above the revised monetary limit from the High Courts 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.

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