Finance Minister Nirmala Sitharaman on Monday directed the Income Tax Department to accelerate disposal of disputed tax demands. She also asked the department to withdraw all the appeals falling below the new threshold within three months.

Sithraman was addressing the Conclave of Principal Chief Commissioners of Income-tax (Pr.CCsIT). “The Union Finance Minister directed all Principal Chief Commissioners of Income Tax (PrCCsIT) to prioritise and accelerate the disposal of disputed tax demands that are currently pending before the faceless appellate authorities. This is aimed at reducing litigation backlog and ensuring timely resolution, thereby enhancing taxpayer trust in the system,” a statement issued by the Finance Ministry said.

According to a Parliamentary committee report, as on September, 2024 around 5.49 lakh appeals are pending before the Commissioner of Income Tax (Appeals), short for CIT(A) and the National Faceless Appeal Centre (NFAC). This involves an amount of ₹18.16 lakh crore.

The FM instructed that all departmental appeals falling below the revised monetary thresholds as notified in recent policy changes be identified and withdrawn within a period of three months.  As per the announcements in the Union Budget 2024-25, the monetary thresholds for filing tax dispute appeals by the department are ₹60 lakhs for the Income Tax Appellate Tribunal (ITAT): Increased from ₹50 lakh to ₹60 lakh, ₹2 crore for high courts and ₹5 crore for the Supreme Court.

Out of the pending 5.77 lakh appeals, over 2.25 lakh appeals are targeted for completion in FY 2025-26, addressing over ₹10 lakh crore of disputed demand. Around 4,605 cases were withdrawn after the monetary limits were raised in 2024, and in around 3,120 cases, appeals were not filed as the monetary limits for filing appeals were increased.

The Minister was apprised that as on June 19, refunds issued for FY 2025-26 as compared to FY 2024-25 saw over 58 per cent growth, showing better Taxpayer services. Over ₹23,000 crore refunds issued on account of Order Giving Effects and over ₹10,000 crore refunds issued on rectification in FY 2025-26.

Sithraman emphasised the need for the timely processing of tax refunds and the proactive resolution of taxpayer grievances. She took note of the grievance cases on CPGRAMS and e-Nivaran platforms. She directed the Income Tax Department to expedite resolution by analysing the nature of grievances and devising strategies not only to resolve the existing pendency but also to address the challenges that are causing the grievances in the first place.

The FM urged the Principal Chief Commissioners (PrCCs) to ensure that tax compliance processes are made simpler, more transparent, and taxpayer-friendly. She highlighted the importance of a structured, process-driven approach to compliance, which, over time, would lead to both greater ease for taxpayers and improved voluntary compliance across the board.

Recognising that certain regions demonstrate superior compliance and service delivery, the FM encouraged the formulation of region-wise strategies for addressing local issues. She further recommended that regions should adopt best practices from better-performing jurisdictions, ensuring consistency and improvement across all key performance areas, the statement said.

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Published on June 23, 2025