Avoidance of Repetitive Appeals by Revenue
To streamline litigation and avoid filing repetitive appeals on the same question of law, Section 158AB empowers the Revenue to defer the filing of an appeal in a subsequent case where an identical question of law is already pending in another case.
- Scope and Application –The provision applies where the Collegium identifies that:
o The question of law arising in a later case from the order of JCIT(A), CIT(A), or ITAT is identical to one already pending in an earlier case;
o The earlier case, which is in favour of the assessee, is pending either:
➢ Before the Jurisdictional High Court under Section 260A;
➢ Before the Supreme Court under Section 261; or
➢ As a Special Leave Petition (SLP) under Article 136 of the Constitution.
The earlier case may pertain to the same assessee or any other assessee.
- Role and Composition of the Collegium –The Collegium is constituted by the Principal CCIT, CCIT, or DGIT and comprises:
o The jurisdictional PCIT or CIT; and
o 2 other officers of the rank of PCIT/CIT nominated by the authority.
o The senior-most member of the Collegium acts as the Chairperson [Order F. No. 370133/13/2022-TPL, dated 28-09-2022].
o Upon finding the questions to be identical, the Collegium informs the PCIT/CIT not to file an appeal before ITAT or the jurisdictional High Court on the issue in the later case.
- Procedure for Deferral
o On receiving communication from the Collegium, the PCIT/CIT may instruct the Assessing Officer (AO) to file an application in Form No. 8A before the ITAT or High Court.
o This application must be filed within 120 days of the receipt of the order from JCIT(A)/CIT(A)/Tribunal.
o The application states that the appeal on the question of law in the later case will be filed after the earlier case is decided.
- Acceptance by the Assessee is Mandatory –The deferral process is initiated only if the assessee accepts that the question of law in the later case is identical to that in the earlier case. If the assessee does not accept, the Department proceeds to file a regular appeal under the normal provisions.
- Appeal in Case of Contradictory Orders –If the order of the JCIT(A) or CIT(A) or ITAT, as the case may be, in the later case, conflicts with the final decision in the earlier case:
o PCIT/CIT may instruct the AO to file an appeal before the ITAT/Jurisdictional High Court against such conflicting order of the JCIT(A) or CIT(A) or ITAT.
o Time limit:
➢ 60 days for filing an appeal to the ITAT;
➢ 120 days for filing an appeal to the High Court;
from the date of receipt of the order of the jurisdictional High Court/Supreme Court
o The jurisdictional PCIT/CIT must follow the procedure specified by the CBDT.
- CBDT Guidelines on Monetary Thresholds –The usual monetary limits prescribed by CBDT for appeal filing also apply to deferral under Section 158AB [Circular No. 8/2023, dated 31-05-2023].
o When an appeal involves multiple issues, if the total tax effect (aggregated across issues) exceeds the monetary limit, appeals on identical questions can be deferred; appeals on non-identical questions can proceed.
o If the tax effect does not exceed the threshold, the appeal cannot be filed or deferred.
o An appeal deferred under Section 158AB can be contested on its merits irrespective of the tax effect until an identical case, where judicial finality is awaited, is resolved and favours Revenue.
If that case doesn’t favour the Revenue and isn’t accepted by the Department, it may be taken to a higher court. Meanwhile, the deferred appeal remains deferred until that identical case is resolved.