Union Budget 2024-25 provided for an enhanced monetary limit for filing appeals related to Direct Taxes, Excise and Service Tax in various judicial fora

Hon'ble Supreme Court today disposed off 573 direct tax cases in view of the revised monetary limit of filing of appeals

The measures are expected to significantly reduce the burden of tax litigation and expedite the resolution of tax disputes in alignment with Government's efforts to promote ‘Ease of Living’ and ‘Ease of Doing Business’

CBDT and CBIC had issued necessary orders for implementation of the amendment

The Hon'ble Supreme Court today disposed off 573 direct tax cases where the tax effect is less than ₹5 crore, in view of the revised monetary limit of filing of appeals.

This significant milestone aligns with the government's efforts to reduce tax litigation and promote Ease of Doing Business.

The Union Budget 2024-25 provided for an enhanced monetary limit for filing appeals related to Direct Taxes, Excise and Service Tax in the Tax Tribunals, High Courts and Supreme Court and the limits were increased to ₹60 lakh, ₹2 crore and ₹5 crore respectively.

In pursuant to the Budget 2024-25 announcement, the CBDT and CBIC had issued necessary orders to enhance the monetary limit for filing appeals in their respective domains. As a result, it is expected that the cases pending before various appellate fora will come down and reduce tax litigation.

Direct Tax

As per the announcements in the Union Budget 2024-25, the monetary thresholds for filing tax dispute appeals by the department were enhanced as follows:

• For Income Tax Appellate Tribunal (ITAT): Increased from ₹50 lakh to ₹60 lakh.
• For High Courts: Increased from ₹1 crore to ₹2 crore.
• For Supreme Court: Increased from ₹2 crore to ₹5 crore.

As a result of these revised limits, it is estimated that around 4,300 cases will be withdrawn from various judicial forums over the course of time:

• ITAT: 700 cases
• High Courts: 2,800 cases
• Supreme Court: 800 cases

Indirect Taxes

Similarly, the limit for filing appeals for the specified legacy Central Excise & Service Tax cases was increased:

• For CESTAT (Customs Excise and Service Tax Appellate Tribunal), the limit was increased to ₹60 lakh from ₹50 lakh
• For the High Court, the limit was increased to ₹2 crore from ₹1 crore.
• For the Supreme Court, the limit was increased to ₹5 crore from ₹2 crore.  

As a result of these revised limits, it is estimated that around 1,050 cases pertaining to specified legacy Central Excise & Service Tax cases are estimated to be withdrawn from various judicial forums:

• Supreme Court: 250 appeals
• High Courts: 550 appeals
• CESTAT: 250 appeals

These measures on the Direct tax and Indirect tax front are expected to significantly reduce the burden of tax litigation and expedite the resolution of tax disputes.

In addition, steps have been taken to deploy more officers dedicated to hearing and deciding income tax appeals, particularly those involving significant tax amounts. These initiatives reflect the government's commitment to improve the ‘Ease of Living’ and 'Ease of Doing Business' across the country by reducing pending litigation.