Tax dept appeals: Govt raises limit

◗ The Centre has raised the threshold monetary limits at which the tax department can challenge rulings from ` 25 lakh to ` 1 crore

To minimise litigation and tackle taxpayers’ grievances, the Centre has decided to increase threshold monetary limits at which the tax department can challenge rulings in favour of taxpayers. Earlier, the tax departments used to challenge orders against them in appellate tribunals if the dispute over tax was over ` 10 lakh. The Centre has now raised this limit to ` 20 lakh. This means the authorities will file appeals in the IncomeTax Appellate Tribunal ( ITAT) or Customs, Excise and Service Tax Appellate Tribunal ( CESTAT) only if the tax amount involved is ` 20 lakh or more.

The government earlier used to challenge verdicts in the Supreme Court if the dispute was over ` 25 lakh, now this limit has been raised to

` 1 crore. Likewise, appeals will now be filed in the high courts if the tax amount is ` 50 lakh or more, up from ` 20 lakh at present.

As the I- T department is the biggest litigant in the country, this will effectively reduce minor litigation and help the department focus on high- value cases.

To minimise litigations and look into taxpayers grievances, the Centre has decided to hike the threshold monetary limits at which tax departments can challenge judgements given in favour of the taxpayers.

Earlier, the tax departments used to challenge judgements gone against them in appellate tribunals if the dispute over tax was over ` 10 lakh. The Centre has now raised this limit to ` 20 lakh. This means that departments will file appeal in I- T Appellate Tribunal ( ITAT) or Customs, Excise and Service Tax Appellate Tribunal ( CESTAT) only if the tax amount involved is ` 20 lakh or more.

Earlier, the government used to challenge petition in Supreme Court if the tax dispute was over ` 25 lakh, now the limit has been enhanced to ` 1 crore.

This will bring down litigations in the apex court.

Appeals would be filed in High Courts if the tax amount involved in litigation is ` 50 lakh, up from ` 20 lakh at present.

This is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigations and help the department to focus on high value litigations.

The I- T department is the biggest litigant in the country. In case of CBDT, out of total cases filed by the department in the I- T Appellate Tribunal ( ITAT), 34 per cent of cases will be withdrawn, said finance ministry. In case of High Courts, 48 per cent of cases will be withdrawn and in case of Supreme Court 54 per cent of cases will be withdrawn. The total percentage of reduction of litigation from department’s side will get reduced by 41 per cent. “However, this will not apply in such cases where substantial point of law is involved,” said the ministry.

Similarly, in case of CBIC, out of total cases filed by the department in Customs, Excise and Service Tax Appellate Tribunal ( CESTAT), 16 per cent of cases will be withdrawn. “In case of High Courts, 22 per cent of cases will be withdrawn and in case of Supreme Court 21 per cent of cases will be withdrawn. The total percentage of reduction of litigation from Department’s side will get reduced by 18 per cent," said the ministry.