File appeals in organised tax evasion cases; don't stick to monetary threshold: CBDT

CBDT directed the income tax authorities to pursue the cases of "organised tax evasion" through long-term capital gains (LTCG) or short-term capital loss (STCL) in courts.

New Delhi: The CBDT directed the income tax authorities on Friday to pursue the cases of "organised tax evasion" through long-term capital gains (LTCG) or short-term capital loss (STCL) in courts as it set aside the condition of sticking to the established monetary limits for filing appeals.

A Central Board of Direct Taxes (CBDT) order accessed by PTI said the decision was being taken after "several references" were received by the board, where a large number of cases of organised tax evasion through LTCG and STCL on penny stocks were noticed.

The Income-Tax (I-T) department had informed the CBDT that it was "unable" to pursue these cases in the higher judicial forums on account of the recently-enhanced monetary limits.

"It has been reported that in a large number of cases, the income tax appellate tribunals (ITATs) and high courts have recognised the unique modus operandi (LTCG and STCL) involved in such scams and passed judgments in favour of the revenue.

"However, in cases where some appellate forums have not given due consideration to the position of law or facts investigated by the department, there is no remedy available with the department for filing a further appeal in view of the prescribed monetary limits," the department had complained to the CBDT.

Hence, the CBDT directed in the order that appeals might be filed "on merits" as an exception to the recent order enhancing the monetary limits for the same.

The order said the board, by way of a special order, could direct filing of appeals in these instances of organised tax evasion activity even if they were below the threshold.

The CBDT frames policies for the I-T department.

It has recently enhanced the monetary limit for filing an appeal before the ITATs to Rs 50 lakh from Rs 20 lakh.

In case of the high courts, the limit has been doubled to Rs 1 crore and in case of the Supreme Court, the limit for filing appeal has been increased from Rs 1 crore to Rs 2 crore.

This was done to "effectively reduce taxpayers' grievances and litigation and help the department focus on litigation involving complex legal issues and high tax effect".