The income tax department will be raising the limit for filing cases in Supreme Court from Rs 25 lakh to Rs 1 crore, and raising the limit from Rs 20 lakh to Rs 50 lakh in High Court, Economic Times has reported.
Under the new rules, appeals in Supreme Court by Central Board of Direct Taxes will reduce by 54 percent and Central Board of Indirect Taxes and Customs will reduce by 21 percent.
“This is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigation and help the department to focus on high-value litigation. This step will also reduce future litigation flow from the department side,” the Finance Ministry has claimed in a statement.
The total reduction in litigation for the Income Tax department is expected to be 41 per cent. However cases that are important from the law’s point of view will not be withdrawn as per the finance ministry. The move is a part of the Modi government's effort to move away from a tax terrorism regime and setup a taxpayer friendly system.