Supreme Court Disposes 573 Direct Tax Cases Under New Appeal Limits

The Supreme Court has disposed of 573 direct tax cases where the tax effect is less than ₹5 crore, in light of the revised monetary limits for filing appeals, as announced by the Ministry of Finance on Tuesday. This decision is part of the government’s ongoing efforts to reduce tax litigation and enhance the Ease of Doing Business in India.

The Union Budget for 2024-25 introduced increased monetary limits for appeals related to Direct Taxes, Excise, and Service Tax in various judicial forums, including Tax Tribunals, High Courts, and the Supreme Court. The new limits are set at ₹60 lakh, ₹2 crore, and ₹5 crore, respectively.

Following the Budget announcement, the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) issued orders to implement these higher thresholds for filing appeals. The Finance Ministry stated that this change is expected to reduce the backlog of cases pending before various appellate forums and thus decrease tax litigation.

Under the new provisions, the monetary thresholds for filing tax dispute appeals have been adjusted: for the Income Tax Appellate Tribunal (ITAT), the limit increased from ₹50 lakh to ₹60 lakh; for High Courts, it rose from ₹1 crore to ₹2 crore; and for the Supreme Court, it went up from ₹2 crore to ₹5 crore. As a result of these revised limits, it is anticipated that approximately 4,300 cases will be withdrawn from various judicial forums over time.

The ministry mentioned that efforts are underway to deploy more officers dedicated to hearing and resolving income tax appeals, particularly those involving substantial tax amounts. “These initiatives reflect the government’s commitment to improving the ‘Ease of Living’ and ‘Ease of Doing Business’ across the country by reducing pending litigation,” the ministry added.