Revision of monetary limits for filing appeals by the department before various appellate bodies or appellate authorities - CBDT clarifies.
Should the Department clog the appellate forums with frivolous appeals? Honestly, government doesn't like it not withstanding "more loyal than the king commissioners". Periodically the government has been fixing monetary limits for the Department to file appeals before various forums.
Board's InstructionNo 1979 - "F.No.279/126/98-ITJ dated the 27th March, 2000 read as
Subject: Revising monetary limits for filing Departmental appeals/references before Income-tax Appellate Tribunal, High Courts and Supreme Court - Measures for reducing litigation - Regarding.
Reference is invited to the Board's Instruction No.1903, dated 28th October, 1992, and Instruction No.1777, dated 4th November 1987, wherein monetary limits of Rs.25,000 for Departmental appeals (in income-tax matters) before the Appellate Tribunal, Rs.50,000 for filing reference to the High Court and Rs.1,50,000 for filing appeal to the Supreme Court were laid down.
2. In supersession of the above instruction, it has now been decided by the Board that appeals will be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder:
(Tax effect) Rs | ||
(i) | Appeal before the Appellate Tribunal (in income-tax matters) | 1,00,000 |
(ii) | Appeal under Section 260A/reference under Section 256(2) before the High Court | 2,00,000 |
(iii) | Appeal in the Supreme Court | 5,00,000 |
The new monetary limits would apply with reference to each case taken singly. In other words, in group cases, each case should individually satisfy the new monetary limits. The working out of monetary limits will therefore not take into consideration the cumulative revenue effect as envisaged in the Board's earlier instruction referred to above.
3. Adverse judgments relating to the following should be contested irrespective of revenue effect :
(i) Where Revenue audit objection in the case has been accepted by the Department.
(ii) Where the Board's order, notification, instruction or circular is the subject matter of an adverse order.
(iii) Where prosecution proceedings are contemplated against the assessee.
(iv) Where the constitutional validity of the provisions of the Act are under challenge.
4. Special leave petitions under Article 136 of the Constitution are filed before the Supreme Court only in consultation with the Ministry of Law. Therefore, where the Chief Commissioner decides to contest an adverse judgment by filing special leave petition before the Supreme Court, they should send the proposal to the Board for further processing.
5. These instructions will apply to litigation under other direct taxes also, e.g., wealth-tax, gift-tax, estate duty, etc.
6. These monetary limits will not apply to writ matters.
7. This instruction will come into effect from April 1, 2000.
Three years later in Instruction No.6/2003, dated 17th July, 2003, Board gave a further clarification
Reference is invited to Board's Instruction No.979, dated 27th March, 2000. Instruction No.1985, dated 29th June, 2000, as also to earlier instructions issued to reduce litigation by fixing monetary limit for filing departmental appeals before SC/HC/ITAT.
In order to avoid ambiguity and to adopt uniformity in approach while filing appeals by the field formation, it is hereby clarified by the Board that the words "monetary limit" and "tax effect" in the aforesaid instruction be read as "revenue effect" which denotes the amount of tax, interest, penalty, fine or any other sum involved.
The instruction is clarificatory in nature and will apply to litigation under other Direct Taxes also, e.g., wealth-tax, gift-tax, estate duty, etc.
In 2005, Board in instruction no.2/2005, dated 24.10.2005, further clarified as,
Clarification regarding revision of monetary limits for filing appeals by Department before various appellate bodies or appellate authorities.
1. Reference is invited to Board's Instruction No.1979, dated 27th March, 2000 [F.No.279/126/98-IT, dated 27th March, 2000], and Instruction No.1985, dated 29th June, 2000 [F.No.279/126/98-IT, dated 29th June, 2000] wherein monetary limits for filing appeals/references before various appellate authorities have been prescribed.
2. In partial modification of the above instruction, it has now been decided by the Board that appeals will henceforth be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder:-
(Income Tax effect) Rs | ||
(i) | Appeal before the Appellate Tribunal | 2,00,000 |
(ii) | Appeal under Section 260A | 4,00,000 |
(iii) | Appeal in the Supreme Court | 10,00,000 |
3. The Board has also decided that in cases involving substantial question of law of importance as well as in cases where the same question of law will repeatedly arise, either in the case concerned or in similar case, should be separately considered on merits without being hindered by the monetary limits.
4. Subject to the paragraphs 2 and 3 above the Instruction No.1979, dated 27t March, 2000, as clarified subsequently in Instruction NO.1985, dated 29th June, 2000, will continue to govern the decision for filing of departmental appeals.
5. This instruction will come into effect from 31st October, 2005.
So the monetary limits were doubled in five years may be keeping in tune with the inflation levels.
Now the Board has further clarified that tax effect does not include interest and where there is a recurring question of law, monetary limit should not be a hindrance. The latest instruction clarifies that
1. The 'tax effect' specified in para 2 means the tax only, i.e. tax excluding interest.
2. cases where the question of law involved or raised in appeal is/are of a recurring nature to be decided by the Court, should be separately considered on merits without being hindered by the monetary limits
INSTRUCTION NO. , Dated: July 16, 2007