Quantum Jump in Monetary Limit for Appeals !

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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is huge relief to tax payers as most of the pending appeals in ITAT where tax efffect is below 20 Lakhs will be withdrawn as the circular has made this circular effective retrospectively.Roughly if the addition in your case was upto 60 Lakh , you will get relief of having no cases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

  1. ‘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’).
  2. The  ‘tax   effect’    shall   be  tax   including   applicable  surcharge and cess.
  3. 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.
  4. 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.