CBDT Expands Scope of Filing of Appeals/SLPs by the Income-tax Department

Circular No. 5/2024, dated 15-03-2024

The Central Board of Direct Taxes (CBDT) has issued new circular for filing appeals by the Department before the Income Tax Appellate Tribunal, High Courts and SLPs/appeals before the Supreme Court. The circular comprises the monetary limit for filing an appeal, exceptions where the decision to appeal or file SLP shall be taken on merits, without regard to the tax effect and the monetary limits, and exceptions for deferral of appeals under section 158AB.

The monetary limits for filing appeals and SLPs have not been changed. However, the circular provides the following additional cases where the appeal or SLP is filed on merits, without having any regard to tax effects and monetary limit:

a) Litigation arising out of disputes related to TDS/TCS matters in both domestic and International taxation charges:

• • Where the dispute relates to the determination of the nature of transaction such that the liability to deduct TDS/TCS thereon or otherwise is under question; or
  • Appeals of International taxation charges where the dispute relates to the applicability of the provisions of a Double Taxation Avoidance Agreement or otherwise.

b) Mandated by a Court’s directions

c) Matters related to wealth tax, fringe benefit tax, equalization levy and any matter other than the Income Tax Act.

Further, Attention is drawn to Circular No. 8/2023 issued vide F.No. 279/Misc./M-93/2018-ITJ (Pt.) dated 31.05.2023 in respect of deferral of appeals u/s 158AB. Exceptions in such cases operate as follows:

a) When judicial finality is achieved in favour of Revenue in the ‘other case’, appeal in the `relevant case’ is contested on merits after the decision in the ‘other case’ irrespective of the extant monetary limits.

b) If the judicial outcome in the ‘other case’ is not in favour of Revenue and is not accepted by the Department, an appeal against the same may be contested on merits in the ‘other case’ irrespective of the extant monetary limits to arrive at judicial finality.

Moreover, it is provided that if an appeal is not filed only because the tax effect is less than the monetary limit specified above, the Pr. Commissioner of Income-tax/Commissioner of Income-tax shall specifically record that

“Even though the decision is not acceptable, the appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in the CBDT Circular.”

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