Circular u/s 268A of the Income-tax Act, 1961 for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court-measures for reducing litigation

Summary– Circular No. 5/2024 by India’s Ministry of Finance outlines guidelines pursuant to section 268A of the Income-tax Act, aiming to streamline appeals filed by the Department of Revenue across judicial bodies like ITATs, HCs, and the SC. It prioritizes reducing litigation by establishing monetary limits and conditions for appeals, focusing on merits rather than solely on tax impact. Exceptions include cases involving constitutional validity, illegal orders, prosecution, and specific directions. The circular provides separate provisions for appeals concerning TDS/TCS, undisclosed foreign income, and tax evasion, stressing clarity in tax effect calculations and ensuring transparency in appeal decisions.

Name- Circular u/s 268A of the Income-tax Act, 1961 for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court-measures for reducing litigation-Reg.

Date-15th March, 2024

Circular number– Circular 5 of 2024

Link– https://incometaxindia.gov.in/communications/circular/circular-no-5-2024.pdf

Brief of Provisions- Circular No. 5/2024 issued by India’s Ministry of Finance under section 268A of the Income-tax Act, 1961, aims to streamline the appeal process for the Department of Revenue before ITATs, HCs, and the SC. It seeks to minimize litigation and ensure efficient administration of justice and revenue interests. The circular sets out monetary thresholds and conditions for filing departmental appeals, stressing the evaluation of merits rather than solely focusing on the tax implications. Specific exceptions are detailed, including cases involving constitutional validity, illegal orders, prosecution, and adverse comments. Appeals concerning TDS/TCS, undisclosed foreign income/assets, tax evasion, and directives from courts are treated separately. Circular No. 8/2023 provides exemptions for appeals under section 158AB, emphasizing finality in judicial decisions. Detailed criteria for assessing tax effects, particularly regarding interest, penalties, and specific provisions, are meticulously outlined. It emphasizes separate computation of tax effects for each assessment year and clarifies procedures for TDS/TCS-related cases.

For a complete brief of the circular please click on – https://incometaxindia.gov.in/communications/circular/circular-no-5-2024.pdf