Centre aims to reduce tax litigation with new limits
I-T Appellate Tribunal (ITAT), 34 per cent of cases will be withdrawn, said finance ministry.
New Delhi: To minimise litigations and look into taxpayers grievances, the Centre has decided to hike the threshold monetary limits at which tax departments can challenge judgements given in favour of the taxpayers.
Earlier, the tax departments used to challenge judgements gone against them in appellate tribunals if the dispute over tax was over Rs 10 lakh. The Centre has now raised this limit to Rs 20 lakh. This means that departments will file appeal in I-T Appellate Tribunal (ITAT) or Customs, Excise and Service Tax Appellate Tribunal (CESTAT) only if the tax amount involved is Rs 20 lakh or more.
Earlier, the government used to challenge petition in Supreme Court if the tax dispute was over Rs 25 lakh, now the limit has been enhanced to Rs 1 crore.
This will bring down litigations in the apex court. Appeals would be filed in High Courts if the tax amount involved in litigation is Rs 50 lakh, up from Rs 20 lakh at present.
This is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigations and help the department to focus on high value litigations.
The I-T department is the biggest litigant in the country. In case of CBDT, out of total cases filed by the department in the
I-T Appellate Tribunal (ITAT), 34 per cent of cases will be withdrawn, said finance ministry. In case of High Courts, 48 per cent of cases will be withdrawn and in case of Supreme Court 54 per cent of cases will be withdrawn. The total percentage of reduction of litigation from department’s side will get reduced by 41 per cent. “However, this will not apply in such cases where substantial point of law is involved,” said the ministry.
Similarly, in case of CBIC, out of total cases filed by the department in Customs, Excise and Service Tax Appellate Tribunal (CESTAT), 16 per cent of cases will be withdrawn. “In case of High Courts, 22 per cent of cases will be withdrawn and in case of Supreme Court 21 per cent of cases will be withdrawn. The total percentage of reduction of litigation from Department’s side will get reduced by 18 per cent," said the ministry.