CBDT issued clarification on monetary limits & exceptions applicable to cases falling u/s 158AB of the IT Act

The CBDT issued?Circular No. 8/2023 dated May 31, 2023?regarding the revision of exceptions to monetary limits for filing appeals deferred under provisions of Section 158AB with the reference of various CBDT’s letters vides?F. No. 279/Misc.142/2007-ITJ(Pt) dated August 20, 2018,?F.No.279/Misc./M-93/2018-ITJ(Pt.) dated September 29, 2022,?and?F.No.279/Misc./M-93/2018-ITJ(Pt.)?dated January 24, 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 August 08, 2019.?Exceptions to the monetary limits are as per Board’s letter?F. No. 279/Misc.142/2007-ITJ(Pt.) dated?August 20, 2018?and OM issued vide?F.No.279/Misc/M-3/2018-ITJ(Pt.) dated September 16, 2019.

In this respect the insertion?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 September 29, 2019, referred to above, the following guidelines on the above subject are hereby issued:

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.

The following?terminology is proposed in respect of para 5 below:

(i)?Yo:?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).

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 158AB?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 (Yo),

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?Vf,?appeal is to be filed on the grounds to which?section 158AB?is applicable, irrespective of the monetary limit at that point in time.

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 Revenue 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.

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.

This issue is under?section 268A?of the?Income Tax Act.

The Circular can be accessed at:?https://incometaxindia.gov.in/communications/circular/circular-8-2023.pdf

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