CBDT Issues Clarifications on Monetary Limits & Exceptions Applicable to Cases Falling u/s 158AB

Circular No. 8/2023 dated 31-05-2023

Section 158AB provides that in a case of an assessee wherein the question of law arising from an order of the Joint Commissioner (Appeals), Commissioner (Appeals) or the ITAT for a particular assessment year is identical to a question of law that is pending before jurisdictional High Court or the Supreme Court in:

(a) assessee’s own case for any other assessment year; or

(b) any other assessee’s case for any assessment year,

Then to avoid duplicity of appeal before judicial forums, based on the communication from Principal Commissioner or Commissioner, the assessing officer shall not file an appeal before the jurisdictional High Court or the ITAT. The Assessing Officer shall instead file an application to the jurisdictional High Court or the ITAT that the appeal on the question of law in the assessee’s case may be filed when the decision on such question of law, in the other case, becomes final.

To decide whether the question of law is identical or not, the provision entrusts the same to the collegium, which shall comprise two or more Chief Commissioners or Principal Commissioners or Commissioners. The CBDT vide Order F.no.370133/13/2022-TPL, Dated 28-09-2022, has also specified collegium for the purpose of section 158AB.

Insertion of this provision has led to queries on monetary limits and exceptions applicable in respect of cases falling within the purview of Section 158AB. To provide clarity on the matter, the Central Board of Direct Taxes (CBDT) has issued the following guidelines:

1. Monetary Limits

The decision regarding the deferral of appeal(s)/grounds of appeal(s) will be based on the current monetary limits specified in Circular No. 17/2019 dated 08-08-2019 read with Board’s letter dated 20-08-2018 and Office Memorandum dated 16-09-2019. Further, the following exception shall also apply:

(a) If the judicial finality is achieved in favour of Revenue in the ‘other case’, appeal in the ‘relevant case’ should be contested on merits subsequent to 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.

2. Scenarios on its Applicability

(a) Cases involving only one ground:
In cases where only one ground is contested and the tax effect is greater than the prescribed monetary limits, the appeal may be deferred in the current year. The appeal is to be filed in the year in which the final decision on the identical question of law is received in favour of Revenue.

(b) Cases involving multiple grounds:
In cases where multiple grounds are contested, and the total tax effect of all the disputed grounds (i.e., grounds to which Section 158AB is applicable and otherwise) is greater than the prescribed monetary limits, the filling of appeal would be as follows:

The appeal may be filed in the current year on residual grounds, i.e., grounds other than to which section 158AB is applicable. Further, filing of appeal on the grounds to which section 158AB is applicable may be deferred.

The appeal is to be filed on the grounds to which section 158AB is applicable in the year in which the final decision on the identical question of law is received in favour of Revenue irrespective of the monetary limit applicable at that point in time

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