Revised CBDT Monetary Limits Apply to Pending Appeals: Bombay HC

CIT Vs Park Air System (Bombay High Court)

Material Facts

The Revenue’s appeal was placed before the Bombay High Court because the tax effect was below the monetary limit of Rs. 2 crores prescribed under CBDT Circular No. 9 of 2024 dated 17 September 2024.

The Revenue submitted that the appeal had been filed on 10 April 2023, when the tax effect exceeded the monetary limit then applicable, and therefore there was no infirmity in continuing the appeal despite the subsequent revision of the monetary limits. It also contended that the appeal fell within the exception introduced by the CBDT Circular dated 15 March 2024, particularly paragraph 3.1(l)(ii), permitting the appeal to be entertained despite the revised monetary limits.

The assessee argued that the relied-upon exception related only to disputes concerning TDS/TCS matters in domestic and international taxation and did not apply to the present appeal.

Procedural History

The appeal came up before the Bombay High Court for directions after the Court noted that the tax effect was below the monetary threshold prescribed by CBDT Circular No. 9 of 2024.

Legal Issue

The Court considered:

• Whether the revised monetary limits prescribed by CBDT Circular No. 9 of 2024 dated 17 September 2024 apply to pending appeals.
• Whether an exception introduced by the CBDT Circular dated 15 March 2024 could be invoked for an appeal filed before the introduction of that exception.

Relevant Statutory Provisions/Circulars

• CBDT Circular No. 9 of 2024 dated 17 September 2024.
• CBDT Circular dated 15 March 2024, paragraph 3.1(l)(ii).

Parties’ Submissions

The Revenue argued that:

• The appeal was validly instituted when filed because it exceeded the monetary limit then in force.
• The appeal was covered by an exception introduced by the CBDT Circular dated 15 March 2024.

The assessee submitted that:

• The cited exception pertained only to TDS/TCS disputes and did not apply to the present appeal.

Court’s Findings and Reasoning

The Bombay High Court referred to its earlier decision in The Principal Commissioner of Income Tax v/s Premier Industrial Corporation Ltd. [(2025) 172 Taxmann.com 289 (Bom)], which reproduced and relied upon earlier precedents.

The Court noted that it had consistently held:

• The revised monetary limits prescribed in CBDT Circulars apply to pending appeals.
• Exceptions introduced through later CBDT Circulars apply prospectively only, from the date of their introduction.

Applying those principles, the Court observed that:

• The present appeal was filed on 10 April 2023.
• The exception relied upon by the Revenue was introduced only on 15 March 2024.

Accordingly, the later exception could not justify continuation of an appeal filed before its introduction.

The Court stated that, in view of this conclusion, it did not examine the assessee’s argument that the appeal did not fall within the relied-upon exception. It also clarified that the questions of law raised in the appeal were kept open for consideration in an appropriate case.

Final Ruling

The Bombay High Court disposed of the Revenue’s appeal as the tax effect was below the monetary limits prescribed by CBDT Circular No. 9 of 2024 dated 17 September 2024. There was no order as to costs. The questions of law raised by the Revenue were kept open.

Cases Discussed

• The Principal Commissioner of Income Tax v/s Premier Industrial Corporation Ltd. (Bombay High Court), (2025) 172 Taxmann.com 289 (Bom)
• CIT v. V. M. Salgaonkar and Brothers (P) Ltd. (Bombay High Court), [2024] 169 taxmann.com 597 (Bombay)
• Pr. CIT v. IPL Loan Trust (Bombay High Court), [2025] 171 taxmann.com 725
• Pr. CIT Axis AD Prim Media (India) Ltd. (Bombay High Court), Income Tax Appeal No. 1998 of 2018

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1. The above Appeal has been placed on board for directions today because we find that the tax effect in the Appeal is less than Rs. 2 Crores as stated in the CBDT Circular No. 9 of 2024 dated 17^th September, 2024.

2. Mr. Subir Kumar, learned Advocate appearing on behalf of the Revenue, submitted that the present Appeal is lodged on 10^th April, 2023, and on that date it was above the monetary limit prescribed by the Circulars issued by the CBDT from time to time. Once this is the case, he submitted that there was no infirmity in prosecuting this Appeal, notwithstanding the fact that by the latest Circular, the subject matter of the Appeal today would be below the monetary limits.

3. In addition to the aforesaid argument, Mr. Suresh Kumar, the learned counsel for the Revenue, submitted that the present Appeal falls within the exception introduced in the Circular dated 15^th March, 2024, and more particularly paragraph 3.1 (l)(ii) thereof. Since the above Appeal falls within the above excepted category, the above Appeal can be entertained notwithstanding that today it is below the monetary limit as set out in the CBDT Circular dated 17^th September, 2024.

4. According to Mr. Jasani, the reliance on the exception is wholly misplaced as the same pertains only to litigation arising out of disputes in TDS/TCS matters, in both domestic and international taxation charges. In the facts of the present case, the Appeal does not relate to any TDS/TCS matter in any domestic or international taxation charge. Hence, the reliance placed on the above exception is wholly misplaced.

5. We have considered the rival contentions. The precedent on this subject/contention of the Revenue, is set out in the case of The Principal Commissioner of Income Tax v/s Premier Industrial Corporation Ltd [(2025)

172 Taxmann.com 289 (Bom)]. Paragraphs 7 and 8 of this decision read thus:-

“7. The CIT v. V. M. Salgaonkar and Brothers (P) Ltd. [2024] 169 taxmann.com 597 (Bombay), our orders dated 05 February 2025 in Income Tax Appeal No. 643 of 2018 concerning Pr. CIT v. IPL Loan Trust [2025] 171 taxmann.com 725 and connected matters and order dated 12 February 2025 in Income Tax Appeal No.1998 of 2018 (Pr. CIT Axis AD Prim Media (India) Ltd.) and connected appeals hold that the monetary limits prescribed in CBDT Circulars would apply to pending appeals. Still, the
exceptions.carved.out.by the CBDT Circulars would apply only prospectively i.e. from the date of the introduction of such exception.

8. Adminedly, before 20 August 2018, these appeals were not covered by any exceptions. However, these appeals were filed because they were beyond the monetary limits prescribe then. The monetary limits have now been revised. These revised monetary limits would also apply to the pending appeals as held in the above precedents. By applying the revised monetary limits to the pending appeals and noting that the exception upon which the Revenue relies was unavailable before 20 August 2018, we uphold the objection on behalf of the assessee and dispose of these two appeals without any cost orders”.

(emphasis supplied)

6. As can be seen from this reproduction, this Court has time and again held that the monetary limits prescribed in the CBDT Circulars will apply to pending Appeals as well. In other words, for the purposes of the monetary limits, the Circular dated 17^th September 2024 would apply to the present Appeal. However, this Court has also held time and again that the exceptions carved out by the CBDT Circulars would apply only prospectively, and would have no application if they were introduced after the filing of the Appeal. Admittedly, in the present case, the Appeal was lodged on 10^th April 2023, while the exception the Revenue relies upon was introduced vide Circular dated 15^th March, 2024. Hence, the exception relied upon by the Revenue in the Circular dated 15^th March, 2024 cannot be a justification for prosecuting the above Appeal that was lodged on 10^th April, 2023.

7. In the light of the aforesaid discussion, this Appeal is accordingly disposed of because the tax effect is below the monetary limits as set out in the CBDT Circular dated 17^th September 2024. However, there shall be no order as to costs.

8. We make it clear that in light of what we have held above, we have not examined the argument of Mr. Jasani that, in the facts of the present case, the Appeal would not fall within the exception relied upon by Revenue. That can be agitated in an appropriate case if the occasion so arises.

9. We also make it clear that the questions of law as projected by the Revenue in the Appeal are kept open to be considered in an appropriate case.

10. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.