FM Instructs CBDT to Withdraw Low-Value Tax Appeals

Finance minister Nirmala Sitharaman held a meeting on Monday where she directed some of the high-ranking officials to accelerate the process of resolving disputed tax demands. It was also directed to the officials to withdraw the appeals filed before the tribunal below the new threshold within the time period of three months.

“The Union Finance Minister directed all Principal Chief Commissioners of Income Tax (PrCCsIT) to prioritize and accelerate the disposal of disputed tax demands that are currently pending before the faceless appellate authorities. This is aimed at reducing litigation backlog and ensuring timely resolution, thereby enhancing taxpayer trust in the system,” said a statement issued by the Ministry of Finance.

It was announced in the Union Budget 2024-25, that the threshold for filing tax dispute appeals by the department has been raised to Rs. 60 lakh for the ITAT from the previous prevailing threshold that was set to Rs. 50 lakh. The threshold has been set to Rs.2 crore for high courts (previously Rs.1 crore) and Rs.5 crore for the Supreme Court (previously Rs.2 crore).

Of the pending 577,000 appeals, over 225,000 appeals are aimed at for completion in the FY 2025-26, accounting for over Rs. 10 lakh crore of disputed demand. More than 4,600 cases were withdrawn and more than 3,100 cases were left unattended due to the significant increase in the monetary limits for filing appeals.

She also asked the officials to enhance the process in such a manner that it becomes more transparent and taxpayer-friendly.