IT department expands options for officials filing appeals, including TDS disputes
The CBDT Circular also clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed by the CBDT. Representative image
The CBDT has allowed income tax authorities to file appeals, irrespective of the monetary threshold, in cases relating to TDS/TCS, undisclosed foreign income or information received from investigative agencies like ED and GST Intelligence.
Currently, tax authorities can file appeals before the ITAT, Supreme Court and Supreme Court, if the disputed tax claim exceeds Rs 50 lakh, Rs 1 crore and Rs 2 crore respectively – a threshold set in 2019.
The Central Board of Direct Taxes (CBDT) in a circular dated March 15 said that the said monetary limits will not be applicable for filing appeals in cases where prosecution has been initiated by the department in the relevant case, and the trial is pending is and a condemnation order has been passed and the same has not been aggravated.
Cases where the assessment is based on information relating to an offense alleged to have been committed under any other law and information received from law enforcement or intelligence agencies such as CBI, ED, DRI, SFIO, NIA, NCB, Directorate General of GST Intelligence (DGGI) and law enforcement agencies of the state, the appeals in such cases would be filed irrespective of the tax claim against the taxpayer.
The threshold would not apply to disputes arising out of disputes relating to TDS/TCS in the field of domestic and international taxes, or disputes relating to the applicability of provisions of the Double Taxation Agreement.
Taxpayers should also file an appeal, regardless of the disputed tax claim, in case of undisclosed foreign income/assets/bank accounts.
About 2.7 crore direct tax demands totaling around Rs 35 lakh crore are being disputed at various forums.
AKM Global, Tax Partner, Amit Maheshwari said the new circular has consolidated several previous circulars on the issue of monetary limits for filing appeals.
“CBDT has expanded the scope of exceptions which are now beyond the ambit of the monetary threshold and under which the department can file the appeals/SLP irrespective of the amount involved. Such exceptions, while appearing reasonable, will add to the volume of appeals made by the department in future,” Maheshwari said.
The CBDT Circular also clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed by the CBDT.
“The filing of appeals in such cases should be decided on the merits of the case. The officials concerned should keep in mind the overall objective of reducing unnecessary litigation and providing assurance to taxpayers on their IT assessments, while they will make a decision on filing an appeal,” the CBDT said.
Nangia Andersen LLP partner Sandeep Jhunjhunwala said the circular expands the list of exceptions – cases where an appeal can be filed by the tax authorities despite not meeting prescribed monetary thresholds. One of these additions to the list of exceptions worth mentioning are legal cases relating to TDS/TCS matters where the obligation to deduct TDS/TCS, having regard to the nature of the transaction, is in question or where the applicability of tax treaties is disputed.
A residual item is also being introduced which will provide an opportunity for the Council to exempt matters from the monetary condition in the interest of justice and revenue, Jhunjhunwala said.
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First print: March 20, 2024 | 00:00 IST