FM Directs Income Tax Dept to Expedite Dispute Resolution, Withdraw Appeals Below New Threshold in 3 Months
FM Nirmala Sitharaman directs the Income Tax Department to fast-track tax dispute resolutions and withdraw low-value appeals within three months to ease litigation backlog
Finance Minister Nirmala Sitharaman directed the Income Tax Department to accelerate the resolution of long-pending disputed tax cases and withdraw departmental appeals that fall below the recently revised monetary thresholds within a three-month deadline.Standardize Accounting Policies – Specimen Drafts at Your Fingertips! Perfect for internal reference and client consistency-...
Finance Minister Nirmala Sitharaman directed the Income Tax Department to accelerate the resolution of long-pending disputed tax cases and withdraw departmental appeals that fall below the recently revised monetary thresholds within a three-month deadline.
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Addressing the Conclave of Principal Chief Commissioners of Income Tax (Pr.CCsIT), Sitharaman expressed the need to reduce litigation backlog and enhance taxpayer confidence in the system. She called for a structured and proactive approach to resolving appeals currently pending before faceless appellate authorities, such as the Commissioner of Income Tax (Appeals) and the National Faceless Appeal Centre (NFAC).
According to the BusinessLine report, as per a recent parliamentary report, over 5.49 lakh appeals were pending as of September 2024, involving disputed tax demands worth an estimated Rs. 18.16 lakh crore. The Finance Minister instructed the department to focus on expediting the disposal of these cases, especially those that qualify for withdrawal under the updated policy.
In the Union Budget 2024-25, the government revised the monetary thresholds for filing appeals, aiming to reduce unnecessary litigation:
- Rs. 60 lakh for appeals before the Income Tax Appellate Tribunal (ITAT) (up from Rs. 50 lakh),
- Rs. 2 crore for High Courts, and
- Rs. 5 crore for the Supreme Court.
Appeals falling below these limits are now to be withdrawn by the department within three months, in line with the policy shift.
So far, 4,605 cases have already been withdrawn, and 3,120 appeals were not filed due to the new thresholds. The department aims to resolve 2.25 lakh appeals in FY 2025-26, addressing more than Rs. 10 lakh crore in disputed demand.
Sitharaman also reviewed progress on taxpayer services, noting a 58% increase in refunds issued in FY 2025-26 compared to the previous year. Over Rs. 23,000 crore in refunds were issued following assessment orders, and another Rs. 10,000 crore through rectifications.
Pointing out the importance of timely refunds and grievance redressal, the Minister urged swift action on cases reported through platforms like CPGRAMS and e-Nivaran. FM called for in-depth analysis of complaint trends to address root causes and improve taxpayer experience. Sitharaman concluded by urging regional tax offices to adopt best practices from top-performing zones and implement localized strategies to improve compliance and service delivery.
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