Tax Dept Withdraws 6,599 Appeals Following Revision of Monetary Limits for Litigation

The tax department has withdrawn over 6,500 appeals filed before various courts and tribunals. This happened after the government increased the minimum amount of money involved in a case (called the monetary limit) that justifies filing an appeal in tax-related matters.

According to a written reply in the Lok Sabha by Minister of State for Finance Pankaj Chaudhary, a total of 6,599 appeals have been withdrawn by the tax departments, including 4,951 by the Income Tax Department alone. The withdrawals follow the issuance of CBDT Circular No. 09/2024, dated September 17, 2024, which raised the monetary thresholds for filing income tax appeals.

Now, tax authorities can only file appeals if the amount involved is more than:

• Rs. 60 lakh before the Income Tax Appellate Tribunal (ITAT),
• Rs. 2 crore before the High Courts, and
• Rs. 5 crore before the Supreme Court or in Special Leave Petitions (SLPs).

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These new limits replaced the earlier ones mentioned in Circular No. 5/2024 dated March 15, 2024, which allowed appeals for disputes involving just Rs. 50 lakh (ITAT), Rs. 1 crore (High Courts), and Rs. 2 crore (Supreme Court). The new limits also apply to tax matters related to TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) under the Income-tax Act, 1961.

The goal of this policy change is to unburden the courts, cut down on government litigation for small disputes, and help the legal system focus on more serious tax cases that involve large amounts or important legal issues.

CBDT also clarified that even if the case crosses the new limits, it should not be appealed unless there is a strong reason to do so. In rare or special cases (as mentioned in earlier guidelines), authorities can still go ahead with an appeal based on the merits of the case.

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It’s not just the Income Tax Department making these changes. The Customs, Central Excise, and Service Tax departments have also followed suit. According to government data:

• 477 appeals related to customs, and
• 1,171 appeals related to excise and service tax
   have also been withdrawn.

In excise and service tax matters, the new appeal limits are:

• Rs. 60 lakh for CESTAT (Customs Excise & Service Tax Appellate Tribunal),
• Rs. 2 crore for High Courts, and
• Rs. 5 crore for the Supreme Court.

For customs cases, the limits are:

• Rs. 50 lakh for CESTAT,
• Rs. 1 crore for High Courts, and
• Rs. 2 crore for the Supreme Court.

This change is seen as a smart and practical shift in policy where the focus is now on solving bigger, more meaningful tax disputes.

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