Unlocking the Vault: A Five-Year Review of India’s Income Tax Litigation Landscape
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Government Transparency on Tax Disputes
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In response to a Rajya Sabha Unstarred Question (No. 1038), the Ministry of Finance disclosed comprehensive data regarding income tax disputes over the last five years.
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Minister of State for Finance, Shri Pankaj Chaudhary, confirmed that the Income Tax Department maintains detailed year-wise records of disputes across various appellate stages.
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Classification of Appellate Levels
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The government tracks pending appeals and the corresponding “locked-up” amounts separately for each tier of the judicial system.
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This classification includes the First Appellate Authority [CIT(A)/JCIT(A)], the Income Tax Appellate Tribunal (ITAT), the High Courts, and the Supreme Court of India.
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First Appellate Authority Trends
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The volume of pending appeals before the First Appellate Authority has remained high, rising from 4,48,992 in FY 2020-21 to a peak of 5,48,278 in FY 2023-24, before slightly dipping to 5,39,863 in FY 2024-25.
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The disputed amount at this stage was highest in FY 2020-21 at approximately ₹24.52 lakh crore, stabilizing around ₹16.75 lakh crore by FY 2024-25.
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Escalation to Higher Courts
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Litigation at the High Court level has seen a significant financial surge, with the disputed amount growing from ₹2.75 lakh crore in FY 2020-21 to over ₹5.65 lakh crore in FY 2024-25.
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Pending cases in the Supreme Court have also increased, rising from 5,567 cases in FY 2020-21 to 6,338 cases in FY 2024-25, with the disputed amount fluctuating around ₹25.40 lakh crore in the most recent year.
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