Revenue’s Appeal Dismissed Due to Low Tax Effect Below ₹60 Lakhs Threshold

By | November 17, 2025
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Revenue’s Appeal Dismissed Due to Low Tax Effect Below ₹60 Lakhs Threshold

Issue

Whether the appeal filed by the Revenue (Income Tax Department) is maintainable when the tax effect involved in the dispute is Rs. 9,75,379/-, which is below the monetary limit prescribed by the CBDT for filing appeals before the Appellate Tribunal.

Facts

  • Appeal Details: The Revenue filed an appeal against the order of the Commissioner of Income Tax (Appeals), NFAC Delhi, dated 12.02.2024, for the Assessment Year 2017-18.

  • Tax Effect: The tribunal noted that the tax effect (the amount of tax in dispute) in this appeal was Rs. 9,75,379/-.

  • CBDT Circular: The Tribunal referred to CBDT Circular No. 09/2024 dated 17.09.2024. According to this circular, the Department has revised the monetary limit for filing appeals before the ITAT to Rs. 60 Lakhs.

  • Comparison: Since Rs. 9.75 lakhs is significantly lower than the prescribed threshold of Rs. 60 lakhs, the maintainability of the appeal was questioned.

Decision

  • The Income Tax Appellate Tribunal (ITAT) dismissed the appeal filed by the Revenue.

  • Reasoning: The dismissal was based on the policy of the Central Board of Direct Taxes (CBDT) to reduce litigation in cases with low tax effects. Since the tax effect was below the mandatory limit of Rs. 60 Lakhs, the appeal was deemed not maintainable.

  • Liberty Granted: The Tribunal granted the Revenue the liberty to seek a recall of this order if it is later discovered that the case falls under any of the specific exceptions carved out in the circular (e.g., cases involving constitutional validity, audit objections, or organized tax evasion).

  • Clarification: The Tribunal explicitly clarified that this dismissal is not an affirmation of the CIT(A)’s order on merits. The legal issues raised by the Revenue are left open for adjudication in an appropriate case where the tax effect exceeds the limit.

Key Takeaways

  • Litigation Management: To reduce the backlog of cases, the CBDT sets monetary thresholds below which the Department cannot file appeals.

  • Threshold for ITAT: As per Circular No. 09/2024 (referenced in the order), the limit for filing appeals before the ITAT is Rs. 60 Lakhs.

  • Binding Nature: Instructions issued by the CBDT under Section 119 are binding on the Income Tax authorities.

  • Exceptions Exist: Such dismissals are generally subject to exceptions. If a case involves a substantial question of law or specific circumstances listed in the circular, the Department can still pursue the appeal regardless of the amount.

THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH
BENCH “SMC” CHANDIGARH
The income Tax Officer,
Ward-1, Fatehabad.
Vs
Shri Kailash Chander,
House No. 139, Village Matana,
Distt. Fatehabad.

Source :- 1762508200-tEgGm5-1-TO