DCIT Vs Satpal Singh Sandhu (Chhattisgarh High Court)
Summary: The Chhattisgarh High Court, in DCIT Vs Satpal Singh Sandhu, disposed of an income-tax appeal filed by the Deputy Commissioner of Income Tax, Circle-1(1), Raipur, after the Income Tax Department acknowledged that the tax liability involved in the dispute was below the revised monetary threshold of ₹2 crore prescribed for departmental appeals before High Courts. The Division Bench comprising Justice Sanjay K. Agrawal and Justice Sanjay Kumar Jaiswal considered the matter on 21 January 2025. During the hearing, counsel appearing for the Revenue informed the Court that the Government of India, Ministry of Finance, had issued CBDT Circular No. 09/2024 dated 17 September 2024, substantially enhancing the monetary limits for filing income-tax appeals before appellate forums. Under the revised framework, the threshold was fixed at ₹60 lakh for appeals before the Income Tax Appellate Tribunal, ₹2 crore for appeals before High Courts and ₹5 crore for appeals before the Supreme Court. Since the tax liability involved in the present case was less than ₹2 crore, the Department requested final disposal of the appeal in accordance with the revised monetary-limit policy. The High Court found the request fair and reasonable and proceeded to examine the relevant provisions of the circular governing departmental litigation.
The High Court reproduced the provisions of Circular No. 09/2024, which amended the earlier CBDT Circular No. 5/2024 dated 15 March 2024. The revised monetary thresholds apply to departmental appeals, including disputes involving TDS and TCS, subject to the exceptions specified in paragraphs 3.1 and 3.2 of the earlier circular. The circular also clarifies that the Department should not file an appeal merely because the tax effect exceeds the prescribed threshold; the decision must be justified on the merits, with due regard to reducing unnecessary litigation and providing certainty to taxpayers. Importantly, paragraph 5 makes the revised limits applicable not only to future appeals but also to appeals already pending before the Supreme Court, High Courts and tribunals, which may accordingly be withdrawn. The circular was issued under Section 268A of the Income-tax Act, 1961. Applying paragraph 5 of the circular dated 17 September 2024, the High Court disposed of the Revenue’s appeal because the tax liability involved was below ₹2 crore. The Court did not adjudicate the underlying substantive tax dispute, and the order was confined to disposal in accordance with the revised departmental appeal policy.
FULL TEXT OF THE JUDGMENT OF CHHATTISGARH HIGH COURT
1. When case is taken for hearing, learned counsel appearing for the appellant would submit that the Government of India, Ministry of Finance has issued a new circular dated 17.09.2024, in which monetary limits for filing Income Tax Appeals by the department before the High Court has been enhanced to Rs.2 Crores, whereas in the present case, the tax liability of assess is less than Rs.2 Crore. Therefore, in light of aforesaid circular dated 17/09/2024, the present appeal may be disposed of finally.
2. The said prayer appears to be fair and reasonable.
3. For ready reference, relevant paragraphs of said circular dated 17/09/2024 is quoted hereinbelow:
“1. Reference is invited to Circular No 5/2024 (F.No. 279 / Misc. 142 / 2007 -ITJ (Pt)) dated 15.03.2024 of Central Board of Direct Taxes (the ‘Board’) vide which monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLP/appeals before Supreme Court have been specified. Further, exceptions to the monetary limits were also specified vide paras 3.1 and 3.2 of the said Circular.
2. As a step towards management of litigation, it has been decided by the Board to revise the monetary limits for filing of appeals in Income-tax cases as stated in Para 4.1 of the aforementioned Circular as follows:-
| S. No. | Appeals/SLPs in Income-tax matters | Monetary Limit (Tax effect in Rs.) |
|---|---|---|
| 1. | Before Income Tax Appellate Tribunal | 60 Lakh |
| 2. | Before High Court | 2 Crore |
| 3. | Before Supreme Court | 5 Crore |
3. Monetary limits given in paragraph 2 above with regard to filing appeal/SLP shall be applicable to all cases including those relating to TDS/TCS under the Income-tax Act, 1961 with exceptions as per paras 3.1 and 3.2 of Circular No 5/2024 dated 15.03.2024, where the decision to appeal/file SLP shall be taken on merits, without regard to the tax effect and the monetary limits.
4. It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. The officers concerned shall keep in mind the overall objective of reducing unnecessary litigation and providing certainty to taxpayers on their Income-tax assessments while taking a decision regarding filing an appeal.
5. The modifications shall come into effect from the date of issue of this Circular. This Circular will apply to SLPs/appeals to be filed henceforth in SC/HCs/Tribunal. It shall also apply to the SLPs/appeals pending before Supreme Court/High Courts/Tribunal, which may accordingly be withdrawn.
6. The above may be brought to the notice of all concerned.
7. This issues under section 268A of the Income-tax Act, 1961.
8. Hindi version will follow. ”
4. In view aforesaid submission of learned counsel for the appellant where monetary limit (tax liability) in the present case is less than Rs.2 Crores, therefore, in light of aforesaid circular (Para-5) dated 17/09/2024, the instant Tax Case stands disposed of.
