Unlocking the Vault: A Five-Year Review of India’s Income Tax Litigation Landscape
Government Transparency on Tax Disputes
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.
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.
Classification of Appellate Levels
The government tracks pending appeals and the corresponding “locked-up” amounts separately for each tier of the judicial system.
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.
First Appellate Authority Trends
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.
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.
Escalation to Higher Courts
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.
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.