BACKGROUND

With an overall objective to reduce litigation, the Central Board of Taxes (CBDT) in pursuance to the powers granted under section 268A¹ of Income-tax Act, 1961 (IT Act), has issued various circulars prescribing monetary limits for filing tax appeals by the Revenue. In March 2024, the CBDT had issued Circular No. 5/2024² to provide detailed guidelines with respect to departmental appeals. As a step towards managing litigation, the CBDT has amended³ the said circular and revised the monetary limits for filing appeals by the tax officers. We, at BDO in India, have analysed and summarised the key aspects of the said circular and provided our comments on its impact hereunder:

What is the revised monetary limit?
The enhanced monetary limit vis-à-vis the previous circular is tabulated hereunder:

Sr No	Appeal/ SLPs in Income-tax matters	Monetary Limits (INR)
		Circular no. 5 /2024	Circular no. 9/2024
1.	Before Income Tax Appellate Tribunal	5mn	6mn
2.	Before High Court	10mn	20mn
3.	Before Supreme Court	20mn	50mn

What will be the effective date of this Circular?

This Circular shall be effective prospectively from 17 September 2024 (i.e. date of issue).

Will the revised monetary threshold be applicable to pending appeals?

The revised monetary threshold will apply to Special Leave Petitions (SLPs)/appeals pending before the Supreme Court/ High Court/ Tax Tribunal.

Will the revised monetary threshold be applicable to Tax Deducted at Source (TDS) / Tax Collected at Source (TCS) matters?

Yes. The revised threshold will be applicable to TDS / TCS matters as well.

Are there any exceptions from the applicability of revised thresholds?

The Circular has not laid down any exceptions. However, the exceptions as stated in Circular No. 5/2024, continue to be in force. For the exceptions, please click here .

BDO IN INDIA COMMENTS

The erstwhile Circular No. 5/2024 provided detailed guidelines with respect to departmental appeals, keeping the monetary limits prescribed by Circular 17/2019 unchanged. The enhancement in monetary limit is a welcome move towards reducing and managing litigation. This is in line with the press release of the Finance Ministry.

It may be noted that the Circular shall also apply to SLPs/appeals pending before the Supreme Court/High Courts/ Tribunal. Therefore, in case of pending appeals where the monetary limit is lower than the revised monetary limits, the taxpayers may seek a request for dismissal of the appeals on account of low tax effect. This revision in limits will certainly reduce the administrative cost and also provide relief for the taxpayers.