The department says the monetary limit does not apply to my case. Which exceptions let it appeal anyway?
The listed ones only: constitutional validity of a provision, a Board order, instruction, circular or notification held illegal or ultra vires, information from law enforcement agencies such as the CBI or ED, cases where prosecution has been launched or a conviction recorded, adverse judicial comments against revenue authorities, undisclosed foreign income or assets, organised tax evasion, court-directed appeals, TDS/TCS disputes turning on the nature of the transaction, and questions on the applicability of a DTAA.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) on 2024-03-15, reported as Circular No. 5/2024 [F. No. 279/Misc.142/2007-ITJ(Pt.)], dated 15 March 2024, issued under section 268A of the Income-tax Act, 1961. It bears on section 268A, section 158AB, section 115JB, section 115JC, section 201(1A) of the Income Tax Act 1961, in Appeals matters.
This circular supersedes Circular 3/2018 and Circular 17/2019 in their entirety, so an exception that existed only in the older framework cannot be invoked — the Bombay High Court applied that in CIT v Sulzer Pumps India Ltd, where the para 10(c) exception under the 2018 circular was held not to be reflected in the 2024 circular. It also requires the authority, when it does not appeal only because of tax effect, to record that the decision is not acceptable, which is aimed at preventing any inference of acquiescence.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Monetary limits and conditions for departmental appeals were previously fixed by Circular No. 3/2018 dated 11 July 2018, the Board's letter in F.No. 279/Misc.142/2007-ITJ (Pt) dated 20 August 2018, and Circular No. 17/2019 dated 8 August 2019. It was Circular 17/2019 that raised the figures to Rs. 50 lakh before the Tribunal, Rs. 1 crore before a High Court and Rs. 2 crore before the Supreme Court, by amending para 3 of the 2018 circular, and that also substituted para 5 to deal with composite orders covering more than one assessment year. Circular 5/2024 was issued in supersession of all three, consolidating the exceptions in paras 3.1 and 3.2 and the limits in para 4.1. Para 4.1 was later substituted by Circular No. 9/2024 dated 17 September 2024, and the circular is now read with that amendment.
Appeals and SLPs are not to be filed where the tax effect does not exceed the monetary limits in para 4.1 - since the substitution by Circular 9/2024, Rs. 60 lakh before the Income Tax Appellate Tribunal, Rs. 2 crore before a High Court and Rs. 5 crore before the Supreme Court. The limits apply to all cases including TDS and TCS, except in the categories listed in para 3.1, where the decision to appeal is to be taken on merits without regard to tax effect: (a) a provision of the Act, the Rules or a notification held constitutionally invalid; (b) an order, notification, instruction or circular of the Board or the Government held illegal, ultra vires the Act or otherwise constitutionally invalid; (c) an assessment based on information about an offence under another law received from a law enforcement or intelligence agency - the circular names the CBI, ED, DRI, SFIO, NIA, NCB, DGGI and State agencies including the State Police, Vigilance Bureau, Anti-Corruption Bureau, Excise Department and State Sales/Commercial Taxes or GST Department; (d) cases where prosecution has been filed and the trial is pending, or a conviction has been passed and not compounded; (e) cases where strictures or adverse comments have been passed, or costs levied, against the Department of Revenue, the CBDT or their officers; (f) cases where the tax effect is not quantifiable or not involved, the circular illustrating this by registration of trusts or institutions under sections 10(23C), 12A/12AA/12AB and orders under section 263; (g) additions relating to undisclosed foreign income, undisclosed foreign assets including financial assets, or an undisclosed foreign bank account; (h) organised tax evasion, including bogus capital gain or loss through penny stocks and accommodation entries; (i) appeals mandated by a court's directions; (j) writ matters; (k) wealth tax, fringe benefit tax, equalisation levy and any matter other than the Income-tax Act; (l) TDS/TCS litigation in domestic and international taxation charges where the dispute is over the nature of the transaction and hence the liability to deduct or collect, or in international taxation charges where the dispute is over the applicability of a double taxation avoidance agreement; and (m) any other case or class of cases which the Board considers necessary to contest in the interest of justice or revenue and specifies by a circular. Para 3.2 adds the deferral cases under section 158AB dealt with by Circular No. 8/2023 dated 31 May 2023. Crossing the threshold is not itself a reason to appeal: para 4.2 says an appeal should not be filed merely because the tax effect exceeds the limit. Where an appeal is not filed only because of the tax effect, the Principal Commissioner or Commissioner must specifically record that fact in the terms set out in para 6.1, and para 6.2 provides that there is then no presumption that the Department has acquiesced in the decision.
Section 268A lets the Board regulate departmental appeals by reference to monetary limits, and the circular is issued under it. The scheme has three moving parts. First, a threshold: tax effect is defined in paras 5.1 to 5.4 as the difference between tax on the assessed total income and tax on that income reduced by the disputed issues, including surcharge and cess but not interest unless chargeability of interest is itself the dispute, with a special formula where income is computed under section 115JB or 115JC, a rule that the tax effect is computed separately for each assessment year and each assessee even under a composite order, and a rule that for TDS and TCS the cumulative effect of all orders for an assessment year of a deductor is taken, including interest under section 201(1A). Second, a set of exceptions in paras 3.1 and 3.2 that take a case out of the threshold regime altogether because its importance is not measured by quantum. Third, a set of safeguards against the assessee turning the Department's silence into a precedent: para 6.1 requires the Commissioner to record in terms that the decision is not acceptable and the appeal is not being filed only because the tax effect is below the limit, para 6.2 says no presumption of acquiescence arises, para 7 directs departmental representatives to bring that to the notice of the Tribunal or Court and to draw attention to section 268A(4), which requires the Tribunal or Court to have regard to the Board's orders and to the circumstances in which an appeal was or was not filed, and para 8 requires the judicial folders to be maintained for easy retrieval and a monthly report to be made to the CIT(J) in the formats annexed to CBDT's Instruction No. 1/2024 dated 9 February 2024. Because Circular 5/2024 supersedes the 2018 and 2019 communications entirely, an exception that existed only there cannot be invoked - the point applied by the Bombay High Court in Principal Commissioner of Income-tax v. Sulzer Pumps India Ltd., where the exception in para 10(c) of the Board's communication of 20 August 2018 read with Circular No. 3/2018, which had allowed appeals to be pursued where the Department had accepted a revenue audit objection, was held not to be reflected in Circular 5/2024.
Even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in the CBDT Circular dated
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Handle my notice → Ask a CA on WhatsAppThe listed ones only: constitutional validity of a provision, a Board order, instruction, circular or notification held illegal or ultra vires, information from law enforcement agencies such as the CBI or ED, cases where prosecution has been launched or a conviction recorded, adverse judicial comments against revenue authorities, undisclosed foreign income or assets, organised tax evasion, court-directed appeals, TDS/TCS disputes turning on the nature of the transaction, and questions on the applicability of a DTAA. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes) and bears on section 268A, section 158AB, section 115JB, section 115JC, section 201(1A) of the Income Tax Act 1961. It is reported as Circular No. 5/2024 [F. No. 279/Misc.142/2007-ITJ(Pt.)], dated 15 March 2024, issued under section 268A of the Income-tax Act, 1961. This circular supersedes Circular 3/2018 and Circular 17/2019 in their entirety, so an exception that existed only in the older framework cannot be invoked — the Bombay High Court applied that in CIT v Sulzer Pumps India Ltd, where the para 10(c) exception under the 2018 circular was held not to be reflected in the 2024 circular. It also requires the authority, when it does not appeal only because of tax effect, to record that the decision is not acceptable, which is aimed at preventing any inference of acquiescence. If it applies to you, the first step is this: When the Department invokes an exception, make it identify the clause in this circular — not in the 2018 or 2019 circulars, which stand superseded.
Monetary limits and conditions for departmental appeals were previously fixed by Circular No. 3/2018 dated 11 July 2018, the Board's letter in F.No. 279/Misc.142/2007-ITJ (Pt) dated 20 August 2018, and Circular No. 17/2019 dated 8 August 2019. It was Circular 17/2019 that raised the figures to Rs. 50 lakh before the Tribunal, Rs. 1 crore before a High Court and Rs. 2 crore before the Supreme Court, by amending para 3 of the 2018 circular, and that also substituted para 5 to deal with composite orders covering more than one assessment year. Circular 5/2024 was issued in supersession of all three, consolidating the exceptions in paras 3.1 and 3.2 and the limits in para 4.1. Para 4.1 was later substituted by Circular No. 9/2024 dated 17 September 2024, and the circular is now read with that amendment. The matter was decided on 2024-03-15 by the CBDT Circulars & Instructions (Central Board of Direct Taxes). On those facts the CBDT Circulars & Instructions held as follows. Appeals and SLPs are not to be filed where the tax effect does not exceed the monetary limits in para 4.1 - since the substitution by Circular 9/2024, Rs. 60 lakh before the Income Tax Appellate Tribunal, Rs. 2 crore before a High Court and Rs. 5 crore before the Supreme Court. The limits apply to all cases including TDS and TCS, except in the categories listed in para 3.1, where the decision to appeal is to be taken on merits without regard to tax effect: (a) a provision of the Act, the Rules or a notification held constitutionally invalid; (b) an order, notification, instruction or circular of the Board or the Government held illegal, ultra vires the Act or otherwise constitutionally invalid; (c) an assessment based on information about an offence under another law received from a law enforcement or intelligence agency - the circular names the CBI, ED, DRI, SFIO, NIA, NCB, DGGI and State agencies including the State Police, Vigilance Bureau, Anti-Corruption Bureau, Excise Department and State Sales/Commercial Taxes or GST Department; (d) cases where prosecution has been filed and the trial is pending, or a conviction has been passed and not compounded; (e) cases where strictures or adverse comments have been passed, or costs levied, against the Department of Revenue, the CBDT or their officers; (f) cases where the tax effect is not quantifiable or not involved, the circular illustrating this by registration of trusts or institutions under sections 10(23C), 12A/12AA/12AB and orders under section 263; (g) additions relating to undisclosed foreign income, undisclosed foreign assets including financial assets, or an undisclosed foreign bank account; (h) organised tax evasion, including bogus capital gain or loss through penny stocks and accommodation entries; (i) appeals mandated by a court's directions; (j) writ matters; (k) wealth tax, fringe benefit tax, equalisation levy and any matter other than the Income-tax Act; (l) TDS/TCS litigation in domestic and international taxation charges where the dispute is over the nature of the transaction and hence the liability to deduct or collect, or in international taxation charges where the dispute is over the applicability of a double taxation avoidance agreement; and (m) any other case or class of cases which the Board considers necessary to contest in the interest of justice or revenue and specifies by a circular. Para 3.2 adds the deferral cases under section 158AB dealt with by Circular No. 8/2023 dated 31 May 2023. Crossing the threshold is not itself a reason to appeal: para 4.2 says an appeal should not be filed merely because the tax effect exceeds the limit. Where an appeal is not filed only because of the tax effect, the Principal Commissioner or Commissioner must specifically record that fact in the terms set out in para 6.1, and para 6.2 provides that there is then no presumption that the Department has acquiesced in the decision.
Section 268A lets the Board regulate departmental appeals by reference to monetary limits, and the circular is issued under it. The scheme has three moving parts. First, a threshold: tax effect is defined in paras 5.1 to 5.4 as the difference between tax on the assessed total income and tax on that income reduced by the disputed issues, including surcharge and cess but not interest unless chargeability of interest is itself the dispute, with a special formula where income is computed under section 115JB or 115JC, a rule that the tax effect is computed separately for each assessment year and each assessee even under a composite order, and a rule that for TDS and TCS the cumulative effect of all orders for an assessment year of a deductor is taken, including interest under section 201(1A). Second, a set of exceptions in paras 3.1 and 3.2 that take a case out of the threshold regime altogether because its importance is not measured by quantum. Third, a set of safeguards against the assessee turning the Department's silence into a precedent: para 6.1 requires the Commissioner to record in terms that the decision is not acceptable and the appeal is not being filed only because the tax effect is below the limit, para 6.2 says no presumption of acquiescence arises, para 7 directs departmental representatives to bring that to the notice of the Tribunal or Court and to draw attention to section 268A(4), which requires the Tribunal or Court to have regard to the Board's orders and to the circumstances in which an appeal was or was not filed, and para 8 requires the judicial folders to be maintained for easy retrieval and a monthly report to be made to the CIT(J) in the formats annexed to CBDT's Instruction No. 1/2024 dated 9 February 2024. Because Circular 5/2024 supersedes the 2018 and 2019 communications entirely, an exception that existed only there cannot be invoked - the point applied by the Bombay High Court in Principal Commissioner of Income-tax v. Sulzer Pumps India Ltd., where the exception in para 10(c) of the Board's communication of 20 August 2018 read with Circular No. 3/2018, which had allowed appeals to be pursued where the Department had accepted a revenue audit objection, was held not to be reflected in Circular 5/2024. In the words reproduced by the source cited on this page: "Even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in the CBDT Circular dated"
It was decided by the CBDT Circulars & Instructions on 2024-03-15 and is reported as Circular No. 5/2024 [F. No. 279/Misc.142/2007-ITJ(Pt.)], dated 15 March 2024, issued under section 268A of the Income-tax Act, 1961. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 268A, section 158AB, section 115JB, section 115JC, section 201(1A), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Appeals and SLPs are not to be filed where the tax effect does not exceed the monetary limits in para 4.1 - since the substitution by Circular 9/2024, Rs. 60 lakh before the Income Tax Appellate Tribunal, Rs. 2 crore before a High Court and Rs. 5 crore before the Supreme Court. The limits apply to all cases including TDS and TCS, except in the categories listed in para 3.1, where the decision to appeal is to be taken on merits without regard to tax effect: (a) a provision of the Act, the Rules or a notification held constitutionally invalid; (b) an order, notification, instruction or circular of the Board or the Government held illegal, ultra vires the Act or otherwise constitutionally invalid; (c) an assessment based on information about an offence under another law received from a law enforcement or intelligence agency - the circular names the CBI, ED, DRI, SFIO, NIA, NCB, DGGI and State agencies including the State Police, Vigilance Bureau, Anti-Corruption Bureau, Excise Department and State Sales/Commercial Taxes or GST Department; (d) cases where prosecution has been filed and the trial is pending, or a conviction has been passed and not compounded; (e) cases where strictures or adverse comments have been passed, or costs levied, against the Department of Revenue, the CBDT or their officers; (f) cases where the tax effect is not quantifiable or not involved, the circular illustrating this by registration of trusts or institutions under sections 10(23C), 12A/12AA/12AB and orders under section 263; (g) additions relating to undisclosed foreign income, undisclosed foreign assets including financial assets, or an undisclosed foreign bank account; (h) organised tax evasion, including bogus capital gain or loss through penny stocks and accommodation entries; (i) appeals mandated by a court's directions; (j) writ matters; (k) wealth tax, fringe benefit tax, equalisation levy and any matter other than the Income-tax Act; (l) TDS/TCS litigation in domestic and international taxation charges where the dispute is over the nature of the transaction and hence the liability to deduct or collect, or in international taxation charges where the dispute is over the applicability of a double taxation avoidance agreement; and (m) any other case or class of cases which the Board considers necessary to contest in the interest of justice or revenue and specifies by a circular. Para 3.2 adds the deferral cases under section 158AB dealt with by Circular No. 8/2023 dated 31 May 2023. Crossing the threshold is not itself a reason to appeal: para 4.2 says an appeal should not be filed merely because the tax effect exceeds the limit. Where an appeal is not filed only because of the tax effect, the Principal Commissioner or Commissioner must specifically record that fact in the terms set out in para 6.1, and para 6.2 provides that there is then no presumption that the Department has acquiesced in the decision. It arises in Appeals matters, on section 268A, section 158AB, section 115JB, section 115JC, section 201(1A) of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Take the monetary figures from whichever circular was in force when your appeal was filed and when it is heard, and verify against that circular rather than the numbers in this one or in a judgment. Do not argue acquiescence from a year in which the Department did not appeal on tax effect: s.268A(4) preserves its right to appeal on the same issue in another year. Where the exception claimed is a TDS/TCS or DTAA point, check that the dispute genuinely turns on the nature of the transaction or on treaty applicability, rather than on quantum.
Superseded by amendment. Circular 5/2024 has not been withdrawn and remains the source of the exception framework, but the database annotates it 'AS AMENDED BY CIRCULAR NO. 9/2024 [F.NO. 279/MISC./M-74/2024-ITJ] DATED 17-9-2024', and its para 4.1 now reads Rs. 60 lakh, Rs. 2 crore and Rs. 5 crore. No later amending or superseding circular is annotated. The circular has been applied: in Principal Commissioner of Income-tax v. Sulzer Pumps India Ltd. [2025] 174 taxmann.com 202 (Bombay) (M.S. Sonak and Jitendra Jain, JJ., IT Appeal No. 32 of 2019, 16 April 2025) the Court recalled its earlier order, held that the para 10(c) revenue-audit-objection exception in the Board's communication of 20 August 2018 read with Circular No. 3/2018 is not reflected in Circular 5/2024, and disposed of a departmental appeal with a tax effect of Rs. 12,11,053. Whether the Board has re-issued these limits under the Income-tax Act, 2025 was not established. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Paragraph numbering, previously uncertain, is settled: the exceptions are paras 3.1 (clauses a to m) and 3.2, the monetary limits para 4.1, the 'not merely because the tax effect exceeds' direction para 4.2, the definition of tax effect paras 5.1 to 5.4, the recording requirement para 6.1, the no-acquiescence rule para 6.2, and the reporting requirement para 8. Circular 9/2024 substituted only para 4.1 and expressly leaves paras 3.1 and 3.2 in place, so quote the exceptions from Circular 5/2024 and the figures from Circular 9/2024. The case usually cited on the lost 2018 exception is Principal Commissioner of Income-tax v. Sulzer Pumps India Ltd., not CIT v. Sulzer Pumps. The database displays Circular 5/2024 with para 4.1 already substituted by Circular 9/2024, so the figures the circular carried between 15 March 2024 and 17 September 2024 could not be read from the circular itself. Those figures - Rs. 50 lakh, Rs. 1 crore and Rs. 2 crore - are confirmed only as the table fixed by Circular 17/2019 dated 8 August 2019, which Circular 5/2024 superseded. Whether the Board has re-issued the limits under the Income-tax Act, 2025 was not established. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Appeals and SLPs are not to be filed where the tax effect does not exceed the monetary limits in para 4.1 - since the substitution by Circular 9/2024, Rs. 60 lakh before the Income Tax Appellate Tribunal, Rs. 2 crore before a High Court and Rs. 5 crore before the Supreme Court. The limits apply to all cases including TDS and TCS, except in the categories listed in para 3.1, where the decision to appeal is to be taken on merits without regard to tax effect: (a) a provision of the Act, the Rules or a notification held constitutionally invalid; (b) an order, notification, instruction or circular of the Board or the Government held illegal, ultra vires the Act or otherwise constitutionally invalid; (c) an assessment based on information about an offence under another law received from a law enforcement or intelligence agency - the circular names the CBI, ED, DRI, SFIO, NIA, NCB, DGGI and State agencies including the State Police, Vigilance Bureau, Anti-Corruption Bureau, Excise Department and State Sales/Commercial Taxes or GST Department; (d) cases where prosecution has been filed and the trial is pending, or a conviction has been passed and not compounded; (e) cases where strictures or adverse comments have been passed, or costs levied, against the Department of Revenue, the CBDT or their officers; (f) cases where the tax effect is not quantifiable or not involved, the circular illustrating this by registration of trusts or institutions under sections 10(23C), 12A/12AA/12AB and orders under section 263; (g) additions relating to undisclosed foreign income, undisclosed foreign assets including financial assets, or an undisclosed foreign bank account; (h) organised tax evasion, including bogus capital gain or loss through penny stocks and accommodation entries; (i) appeals mandated by a court's directions; (j) writ matters; (k) wealth tax, fringe benefit tax, equalisation levy and any matter other than the Income-tax Act; (l) TDS/TCS litigation in domestic and international taxation charges where the dispute is over the nature of the transaction and hence the liability to deduct or collect, or in international taxation charges where the dispute is over the applicability of a double taxation avoidance agreement; and (m) any other case or class of cases which the Board considers necessary to contest in the interest of justice or revenue and specifies by a circular. Para 3.2 adds the deferral cases under section 158AB dealt with by Circular No. 8/2023 dated 31 May 2023. Crossing the threshold is not itself a reason to appeal: para 4.2 says an appeal should not be filed merely because the tax effect exceeds the limit. Where an appeal is not filed only because of the tax effect, the Principal Commissioner or Commissioner must specifically record that fact in the terms set out in para 6.1, and para 6.2 provides that there is then no presumption that the Department has acquiesced in the decision.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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