CBDT has just issued circular no 3/2018 dt 11/07/2018 by which the department has increased limit for filing appeal before ITAT, High Courts and before Supreme Court. The effect of this circulra is huge relief to tax payers as most of the pending appeals in ITAT where tax efffect is below 20 Lakhs will be withdrawn as the circular has made this circular effective retrospectively.Roughly if the addition in your case was upto 60 Lakh , you will get relief of having no cases in ITAT or if addition was upto1.5 crore , the cases from High Court wll be withdrawan
What is new monetary limits for appeal ?
Para 3 of the circular provides that appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:
|S. No.||Appeals/ SLPs in Income-tax matters||Monetary Limit (Rs.)|
|1.||Before Appellate Tribunal||20,00,000|
|2.||Before High Court||50,00,000|
|3.||Before Supreme Court||1,00,00,000|
What is tax effect for the purpose of monetary limit?
The Circular has explained clearly the meaning of tax effect and the way tax effect is to be regarded itself is beig relief because it will not contain any interest component Here is summary of meaning of tax effect
- ‘tax effect’ means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as ‘disputed issues’).
- The ‘tax effect’ shall be tax including applicable surcharge and cess.
- The tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect.
- In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.
Get the circular from here.