Circular No. 23/2019

Exception to monetary limits for filing appeals specified in any circular issued under section 268A of the income tax act 1961 reg

What this is

Circular No. 23/2019 was issued by the Central Board of Direct Taxes on 6 September 2019. Its subject is Exception to monetary limits for filing appeals specified in any circular issued under section 268A of the income tax act 1961 reg.

This fixes the monetary limits below which the department will not appeal. It binds the department only: it is not a rule about the merits, and an assessee cannot draw an inference from a withdrawn appeal.

What it does

Creates an exception to the monetary limits for departmental appeals fixed by the circulars issued under section 268A. Notwithstanding anything in those circulars, an appeal to the Appellate Tribunal or the High Court, or a special leave petition or appeal to the Supreme Court, may be filed on merits where the Board, by a special order, directs the filing of an appeal in a case involving organised tax evasion activity.

Why it was issued

Several references were received that in a large number of cases of organised tax evasion through bogus long-term capital gain or short-term capital loss on penny stocks, the Department could not pursue the matter in the higher fora because of the enhanced monetary limits, and that where an appellate forum had not given due consideration to the law or to the facts investigated, no remedy remained.

Who it reaches

Assessees with additions on penny stock long-term capital gain or short-term capital loss
Departmental representatives seeking authority to appeal a low tax effect case
The Board, which must pass a special order in each such case

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.268A	s.373

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

F. No. 279/Misc.lM-93/20l8-ITJ(Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board Direct Taxes
Judicial Section
Circular No. 23 of20l9
New Delhi, 6th September 2019
Subject: -Exception to monetary limits for filing appeals specified in any Circular issued under Section 268A of the Income-tax Act, 1961-reg
Reference is invited to the Circulars issued from time to time by Central Board of Direct Taxes (the Board) under section 268A of the Income-tax Act,1961 (the Act), for laying down monetary limits and other conditions for filing of departmental appeals before Income Tax Appellate Tribunal (ITA T), High Courts and SLPs/appeals before Supreme Court.

2. Several references have been received by the Board that in large number of cases where organised tax-evasion scam is noticed through bogus Long-Term Capital Gain (LTCG)/Short Term Capital Loss (STCL) on penny stocks and department is unable to pursue the cases in higher judicial fora on account of enhanced monetary limits. It has been reported that in large number of cases, ITA Ts and High Court have recognized the unique modus operandi involved in such scam and have passed judgements in favour of the revenue. However, in cases where some appellate fora have not given due consideration to position of law or facts investigated by the department, there is no remedy available with the department for filing further appeal in view of the prescribed monetary limits.

3. In this context, Board has decided that notwithstanding anything contained in any circular issued U/S 268A specifying monetary limits for filing of departmental appeals before Income Tax Appellate Tribunal (IT AT), High Courts and SLPs/appeals before Supreme Court, appeals may be filed on merits as an exception to said circular, where Board, by way of special order direct filing of appeal on merit in cases involved in organised tax evasion activity.

4. Hindi version follows.

Copy to:
N'().M1~"IIJ1 (N eetika 13an a'G\ -
Director (ITJ)
CBDT, New Delhi
1. Chairman, Members and all other officers in CBDT of the rank of Under Secretary and above.
2. All Pr. Chief Commissioners oflncome tax and all Directors General oflncome Tax
3. ADG (PR, P&P), Mayur Bhawan, New Delhi for printing in the quarterly Tax Bulletin and for circulation as per usual mailing list.
4. The Comptroller and Auditor General ofindia.
5. ADG (Vigilance), Mayur Bhawan, New Delhi.
6. Joint Secretary & Legal Advisor, Ministry of Law & Justice, New Delhi.
7. All Directorates of Income-tax, New Delhi and Pro DGIT(NADT), Nagpur.
8. ITCC (3 copies).
9. ADG (System)-4, for uploading on the Department's website.
10. Data Base Cell for uploading on irsofficersonline.gov.in.
11. njrs_support@nsdl.co.in for uploading on NJRS.
12. Hindi Cell for translation.
13. Guard file.

NlJQ/"IA:) ~ 6ii 0'1 l IQ. (Neetika Bansa )
Director (ITJ)
CBDT, New Delhi

What to watch

The exception does not operate by itself: a special order of the Board directing the filing is a condition, and its absence is a good objection to maintainability.
The circular gives no definition of organised tax evasion activity, so the characterisation is contestable on the facts.
It overrides the monetary limit only; the appeal must still be filed within limitation and on merits.
The gateway is generally worded, so it is not confined to penny stock cases even though those prompted it.

Where you meet it

On a preliminary objection before the Appellate Tribunal that a departmental appeal in a penny stock matter is below the monetary limit, where the Department pleads this exception.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 9/2024 — ]1.No.279!Misc'!M-74/2024-/T.I 17 September 2024
Circular No. 17/2019 — Further enhancement of monetary limits for filing of appeals by the department before income tax appellate tribunal high 8 August 2019
Circular No. DIT(L&R)-I/SLP/393/2011/4589 — Section 268A of the Income-tax Act, 1961 - Appeals and Revision - Filing of Appeal or Application for Reference by Incom 2 September 2011

← Circular No. 25/2019 · Circular No. 22/2019 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.