In a bid to minimise litigations pertaining to tax matters and reduce the long-pending grievances of taxpayers, the Finance Ministry has decided to increase the limit of tax amount involved for tax departments to file appeals in tribunals and courts. Now, the tax departments – Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes and Customs (CBIC) – will be able to file appeals at the tribunal level if the tax amount involved is Rs 20 lakh or more. This move has been advanced in order to reduce the taxpayer litigation burden and grievances.
Currently, the limit is Rs 10 lakh for filing appeals in tribunals. Moreover, the limit of filing an appeal in High Courts is being increased to Rs 50 lakh for CBDT and CBIC from Rs 20 lakh at present. The threshold limit is being hiked to Rs 1 crore from Rs 25 lakh at present, for filing an appeal in the Supreme Court.
The move will ensure that 34 per cent of the cases filed by CBDT in ITAT will be withdrawn. In the case of high courts, 48 per cent of the cases will be withdrawn and in case of the Supreme Court, 54 per cent of cases will be withdrawn. The total percentage of reduction of litigation from CBDT’s side will get reduced by 41 per cent.
Similarly, in case of CBIC, out of total cases filed by the Department in CESTAT, 16% of cases will be withdrawn. In case of High Courts, 22% of cases will be withdrawn and in case of Supreme Court 21% of cases will be withdrawn. The total percentage of reduction of litigation from Department’s side will get reduced by 18%. However, this will not apply in such cases where substantial point of law is involved.
This move will benefit taxpayers and tax administration by saving both time and effort. Increasing the threshold limit and a more pragmatic approach in picking up the case would lead to a better tax management. Focusing on only select high-value cases will also ensure quick remedy and hassle-free redressal to the taxpayers.