CBDT vide Circular No. 08/2023 dated 31.05.2023 revises the exceptions to the monetary limits for filing of appeals deferred under section 158AB of the Income-tax Act, 1961 (‘Act’).
Finance Act, 2022 has inserted a new section 158AB to provide a procedure when an appeal by revenue is pending on an identical question of law. The extant provisions provide that where the collegium is of the opinion that any question of law arising in the case of an assessee for any assessment year (“relevant case”) is identical with a question of law already raised in his case or in the case of any other assessee for an assessment year, which is pending before the jurisdictional High Court under section 260A or the Supreme Court in an appeal under section 261 or in a special leave petition under article 136 of the Constitution, against the order of the Appellate Tribunal or the jurisdictional High Court, as the case may be, in favour of such assessee (“other case”), it may, decide and intimate the Commissioner or Principal Commissioner not to file any appeal, at this stage, to the Appellate Tribunal under sub-section (2) of section 253 or to the High Court under sub-section (2) of section 260A against the order of the Commissioner (appeals) or the Appellate Tribunal, as the case may be.
Basically, section 158AB is introduced to reduce the repeated litigation between taxpayers and the department.
To decide whether a question of law is identical or not, the provision entrusts the same to the collegium, which shall comprise two or more Chief Commissioners or Principal Commissioners or Commissioners. The CBDT vide an Order dated 28.09.2022 in F.No.370133/13/2022-TPL specified collegium for the purpose of section 158AB.
CBDT vide Circular No. 17/2019 dated 8th August 2019 has revised the monetary limits for filing departmental appeals before various appellate forums including ITAT, High Court & Supreme Court as listed below-
The Board has clarified that the insertion of section 158AB has led to queries on monetary limits and exceptions applicable in respect of cases falling within the purview of Section 158AB.
As per this, the decision regarding the deferral of appeals and/or grounds of appeal will be based on the current monetary limits as specified in the Circular of 2019 (supra) read with Board’s letter dated 20.08.2018 and Office Memorandum (OM) dated 16.09.2019.
CBDT further clarifies that where only one ground is contested and the tax effect is greater than the prescribed monetary limits, the appeal may be deferred in the current year. The appeal is to be filed in the year in which the final decision on the identical question of law is received in favour of Revenue.
Read other Articles on Section 158AB
Section 158AB: Avoid Repetitive Appeals by Department
CBDT Issues Order for Constitution of Collegium for Deferment of Appeal under section 158AB
CBDT Notifies Form 8A for making Application to defer Appeal u/s 158AB
In cases where multiple grounds are contested, and the total tax effect of all the disputed grounds (i.e. grounds to which Section 158AB is applicable and otherwise) is greater than the prescribed monetary limits, the filling of appeal would be as follows:
a) Appeal may be filed on residual grounds, i.e., grounds other than to which section 158AB is applicable in the current year.
b) Filing of appeal on the grounds to which section 158AB is applicable may be deferred.
c) Appeal is to be filed on the grounds to which section 158AB is applicable in the year in which the final decision on the identical question of law is received in favour of Revenue irrespective of the monetary limit applicable at that point in time.
Read the full text of CBDT Circular No. 8/2023 dated 31.05.2023 on Revision of exceptions to monetary limits for filing appeals deferred under section 158AB
Circular No.8/2023
No. 279/Misc./M-93/2018-ITJ(Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes, New Delhi
*****
Dated the 31st May, 2023
Sub:- Revision of exceptions to monetary limits for filing appeals deferred under provisions of Section 158AB-reg.
Ref:- 1. CBDT Letter F.No.279/Misc.142/2007-ITJ(Pt) dated 20.08.2018
2. CBDT letter F.No.279/Misc./M-93/2018-ITJ(Pt.) dated 29.09.2022
3. CBDT Letter F.No.279/Misc./M-93/2018-ITJ(Pt.) dated 24.01.2023
The Board has, from time-to-time, revised monetary thresholds for filing appeals before various judicial fora. The last such revision was through Circular No. 17/2019 dated 08.08 .2019. Exceptions to the monetary limits are as per Board's letter F.No. 279/Misc.142/2007-ITJ(Pt.) dated 20.08.2018 and OM issued vide F.No.279/Misc./M-93/2018-ITJ(Pt.) dated 16.09.2019.
2. In this respect the insertion of Section 158AB in the Income Tax Act, 1961 [hereinafter referred to as the Act] has led to queries on monetary limits and exceptions applicable in respect of cases falling within the purview of Section 158AB of the Act. In supersession of the letter dated 29.09.2022, referred to above, the following guidelines on the above subject are hereby issued:
3. At the outset it is clarified that references to collegiums constituted u/s 158AB of the Act for deciding on the deferral of appeal(s)/grounds of appeal(s) would be made having regard to the extant monetary limits read along with the exceptions to the same, as mentioned in para 1 above and the exceptions provided in para 6 below.
4. The following terminology is proposed in respect of para 5 below:
(i) Y0: the current year in which appeal filing is under consideration, and
(ii) Yf: the year in which the final decision on the question of law is received in favour of Revenue in the 'other case' ('other case' being as referred to in section 158AB of the Act).
5. Scenarios on the applicability of monetary limits:
(i) In cases where only one ground is contested and where the tax effect is greater than the monetary threshold as per the extant monetary limits for filing appeals at relevant judicial fora, set by CBDT, and section l58AB is applicable to it, appeal may be deferred in the current year (Yo) in view of the provisions of section 158AB. The appeal is to be filed in the year in which the final decision on the identical question of law is received in favour of Revenue in Yf.
(ii) In cases where multiple grounds are contested and where the total tax effect of all the disputed grounds (i.e., grounds to which Section 158AB is applicable and otherwise) is greater than the extant monetary limits for filing appeals at relevant judicial fora, set by CBDT, and Section 158AB is applicable only to certain grounds, the guidelines for filing appeal are as follows:
(a) in the current year (Y0),
i. filing of appeal on the grounds to which section 158AB is applicable may be deferred in view of the provisions of that section, and
ii. appeal may be filed on the residual grounds.
(b) in the year in which the final decision on the identical question of law is received in favour of Revenue in Yf, appeal is to be filed on the grounds to which section 158AB is applicable, irrespective of the monetary limit at that point in time.
6. In respect of deferring appeals u/s 158AB of the Act, while adhering to the guidelines as laid down in the preceding paras, it is to be ensured that when judicial finality is achieved in favour of Revenue in the 'other case', appeal in the 'relevant case' should be contested on merits subsequent to the decision in the 'other case' irrespective of the extant monetary limits. Further, if the judicial outcome in the ‘other case’ is not in favour of Revcnue and is not accepted by the Department, appeal against the same may be contested on merits in the 'other case' irrespective of the extant monetary limits, to arrive at judicial finality.
7. The above shall come into effect from the date of issue of this letter and may be brought to the knowledge of all officers working in your region.
8. This issues under section 268A of the Income Tax Act.
((Devaki Niranjana)
DCIT(OSD), ITJ-II,CBDT
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