2025 (5) TMI 627 - HC - Income Tax

Monetary limits for filing Income Tax Appeals by the department before the High Court - HELD THAT - In view aforesaid submission of learned counsel for the appellant where monetary limit (tax liability) in the present case is less than Rs.2 Crores therefore in light of aforesaid circular dated 17/09/2024 the instant Tax Case stands disposed of.

Summary

The Chhattisgarh High Court, through Hon'ble Shri Sanjay K. Agrawal, J., disposed of the Income Tax appeal on the basis of a new Government of India, Ministry of Finance circular dated 17.09.2024. The circular revises monetary limits for filing Income Tax appeals by the department: Rs.60 lakh before the Income Tax Appellate Tribunal, Rs.2 crore before the High Court, and Rs.5 crore before the Supreme Court. The present case involved a tax liability below Rs.2 crore, thus falling under the revised threshold for High Court appeals.Crucially, the circular emphasizes that appeals should not be filed merely because the tax effect exceeds monetary limits; decisions must be "taken on merits" with the objective of "reducing unnecessary litigation and providing certainty to taxpayers." The circular applies prospectively and also to pending appeals, which "may accordingly be withdrawn." Issued under Section 268A of the Income-tax Act, 1961, the circular's implementation led the Court to dispose of the instant appeal as per Para 5 of the circular.In sum, the Court held that since the tax liability is below the enhanced threshold of Rs.2 crore, the appeal is not maintainable, resulting in final disposal consistent with the Government's litigation management policy.