In a major setback to the income tax department, the Income Tax Appellate Tribunal ( ITAT ), Ahmedabad bench has dismissed more than 600 appeals in a single day.
The cases were dismissed on the basis of recent Circular issued by CBDT on August 8, the Circular had increased the threshold for filing cases in ITAT from Rs 20 Lakh to Rs 50 Lakh retrospectively.
The gross amount included in the cases were around Rs. 350 crores. The Tribunal observed that the tax effect involved in all these appeals does not exceed the revised threshold of Rs. 50 lakhs.
The department argued that the CBDT circular is not retrospective as it specifically states that the said modifications shall come into effect from the date of issue of this Circular.
However, the Tribunal clarified that the CBDT’s latest circular has to be read in conjunction with the CBDT circular issued in July 2018.
ITAT rules that, “the relaxation in monetary limits for departmental appeals, vide CBDT circular dated 8th August 2019 shall be applicable to the pending appeals in addition to the appeals to be filed henceforth.”
ITAT appreciated the move and noted in its order “very pragmatic and taxpayer friendly policy decision by the Government of India for reducing the income tax litigation” it further observed that, “ in an environment in which retrospectively was attached only to the taxation and not to tax reliefs or concessions, such an approach is a pleasant departure from legacy practices.”
Tribunal noted that increasing monetary limits offers taxpayers freedom from the prolonged mental agony and uncertainty of litigation.
On August 8
With a view to reduce tax litigations, the CBDT had issued a circular on 8th August and revising the monetary tax disputes limit for ITAT appeals from Rs 20 Lakh to Rs 50 Lakh, Similarly for High Courts from Rs 50 Lakh to Rs 1 Cr and for Supreme Court it was revised to Rs 2 Cr.
