In the recent circular, The CBDT has vide circular No.17/2019 dated 8th August 2019 has further enhanced the monetary limits of filing of appeal by the Department before the Income Tax Appellate Tribunal (ITAT), High Courts and SLPs/appeals before Supreme Court.
This step was taken for the management of litigation and to ensure smoother transition to the proposed direct tax code.
It is for the second time that the limit has been raised within a year.
The monetary limit for an appeal before the Income Tax Appellate Tribunal has been increased to Rs 50 lakh from Rs 20 lakh by the Central Board of Direct Taxes (CBDT).
In case of high courts, the limit has been doubled to Rs 1 crore and in case of Supreme Court, the revised limit for filing appeal has been increased from Rs 1 crore to Rs 2 crore.
Increased in the monetary limits will further help the Department in focussing its resources on high value/complex appeals.
As per the Economic Survey of 2017-18. It had stated that while the departmental appeals account for 85 per cent of the total number of appeals, the department was found to have a failure rate of more than 65 per cent.
Frank D’Souza, Partner & Leader – Corporate and International Tax, PwC India, said “This is a welcome move. However, the administration should put some serious thought behind a litigation withdrawal scheme along the lines that has been recently introduced in relation to indirect taxes,”.
With the enhancement of the fees, the number of outstanding litigation cases is expected to come down which will enable the government to focus its limited resources on more revenue accretive cases.