Chhattisgarh HC Dismisses Income Tax Appeal in View of Revised ₹2 Crore Monetary Limit, Following CBDT Circular
The HC dismissed the tax department’s appeal applying the CBDT’s latest circular that bars High Court tax appeals where the disputed amount is below ₹2 crore
The Chhattisgarh High Court at Bilaspur dismissed the Income Tax Department’s appeal against individual taxpayer holding that the tax effect involved was below the monetary threshold of ₹2 crore as prescribed in the latest CBDT Circular dated 17.09.2024. The appeal, filed by the Deputy Commissionerof Income Tax, challenged an earlier order passed in favour of Asha...
The Chhattisgarh High Court at Bilaspur dismissed the Income Tax Department’s appeal against individual taxpayer holding that the tax effect involved was below the monetary threshold of ₹2 crore as prescribed in the latest CBDT Circular dated 17.09.2024.
The appeal, filed by the Deputy Commissionerof Income Tax, challenged an earlier order passed in favour of Asha Soni. However, during the hearing, the Department itself acknowledged that the tax demand in question was below the revised threshold for filing appeals before the High Court. Recognizing this, the Court disposed of the matter without going into the merits of the case.
The Department had filed the appeal, seeking to overturn a lower appellate order that provided relief to the assessee, Asha Soni. However, when the matter came up before the Bench the Department’s counsel, submitted that as per the latest circular issued by the Ministry ofFinance, the monetary limit for filing appeals before the High Court had been raised to ₹2 crore.
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Since the tax effect in taxpayer’s case was lower than ₹2 crore, the Department sought permission to withdraw the appeal, in line with the Central Board of Direct Taxes (CBDT) Circular No. 5/2024 dated 15.03.2024, as further amended on 17.09.2024.
The cited circulars are part of the CBDT’s litigation management strategy aimed at reducing unwarranted tax disputes and easing the compliance burden on taxpayers.
The circular also reiterated that the decision to file appeals should be guided by the merits of the case and not solely by the quantum of tax effect. It cautioned the Department against filing appeals mechanically and emphasized the need for a balanced approach to litigation.
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Taking note of the Department’s fair submission, the Division Bench observed that the prayer for withdrawal was reasonable in light of the CBDT’s litigation policy. The Court proceeded to dispose of the appeal without examining the merits, thus saving judicial time and reducing avoidable litigation.
The decision aligns with the broader policy direction of the CBDT, which has in recent years sought to unclog the legal system by discouraging the filing of appeals in low tax-effect cases. The move is expected to allow tax officers to concentrate on high-value and legally contentious matters, reducing the backlog of cases pending in appellate forums.
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