Section 268A: Departmental Appeals and CBDT Monetary Limits

Section 268A of the Income-tax Act, 1961 empowers the Central Board of Direct Taxes (CBDT) to prescribe monetary thresholds for departmental appeals. It also clarifies that a decision not to appeal because of a Board instruction does not mean the tax department has accepted the disputed legal position for all cases.

Section 268A: Statutory provision under the Income-tax Act, 1961

The following reproduces the five substantive sub-sections of the original provision for reference.

1(1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.

(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of-

(a) the same assessee for any other assessment year; or

(b) any other assessee for the same or any other assessment year.

(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.

Legislative note: Section 268A was inserted by the Finance Act, 2008 with retrospective effect from 1 April 1999.

Meaning of Section 268A, sub-section by sub-section

Sub-section (1): Power to fix monetary limits

The CBDT (the Board) may issue orders, instructions or directions prescribing the tax-effect threshold for departmental appeals or applications for reference. These instructions regulate decisions by income-tax authorities to contest appellate orders.

Sub-section (2): No permanent bar for another year or taxpayer

If the department does not appeal an issue in one assessment year because of a monetary-limit instruction, it can still appeal the same issue for another assessment year of the same taxpayer or for another taxpayer, subject to the applicable instructions and law.

Sub-section (3): Non-filing does not imply acceptance

A taxpayer cannot argue that the department has legally accepted a disputed issue solely because it did not file an appeal in another matter in compliance with the monetary-limit instructions.

Sub-section (4): Tribunal and court must consider instructions

When hearing an appeal or reference, the Tribunal or court must take account of the relevant CBDT instructions and the circumstances explaining why an appeal was, or was not, filed.

Sub-section (5): Earlier instructions recognised

CBDT orders, instructions and directions fixing monetary limits issued before the insertion of this section are treated as having been issued under sub-section (1), with the corresponding legal consequences.

CBDT monetary limits for departmental appeals

CBDT Circular No. 9/2024 dated 17 September 2024 amended Circular No. 5/2024 dated 15 March 2024 and prescribed the following monetary limits for departmental appeals under the 1961 Act. These are thresholds based on the defined tax effect, not the assessed income or the total tax demand. Check for any later applicable instructions before filing or objecting to an appeal.

The circular also states that an appeal should not be filed merely because the tax effect exceeds the specified threshold: the department must assess the merits. These limits are instructions for departmental litigation and do not set the monetary eligibility for a taxpayer's own statutory appeal.

Exceptions and practical consequences

Circular No. 5/2024, read with Circular No. 9/2024, provides categories where the department may decide to appeal on merits irrespective of the monetary limit. These include specified questions concerning the constitutional validity of legislation, legality of government or CBDT instruments, certain information from enforcement agencies and prosecution-related matters. The precise scope and additional exceptions must be checked against the full circulars.

• Low tax effect: an appeal may be liable to withdrawal or non-filing under applicable CBDT instructions unless an exception applies.
• Same issue, different year: the department is not necessarily barred from appealing a later year merely because it did not appeal an earlier year.
• No automatic concession: the non-filing of a departmental appeal does not itself establish that the disputed interpretation is accepted.
• Taxpayer appeals: a taxpayer's own right of appeal and deadlines arise under the relevant appellate provisions, not the department's monetary-limit circular.

Income-tax Act, 2025: Section 373

Section 373 of the Income-tax Act, 2025 is the corresponding provision governing the filing of appeals by income-tax authorities. It retains the Board's power to set monetary limits, provides that non-filing for one tax year or taxpayer does not bar an appeal in another, prevents an inference of departmental acquiescence, and requires the appellate forum to consider the Board's instructions. Unlike Section 268A of the 1961 Act, the new wording is framed around appeals and tax years rather than appeals or references and assessment years.

For pending proceedings and disputes relating to years before 1 April 2026, consult Section 536 (repeal and savings) of the 2025 Act and the Income Tax Department's transitional guidance. The monetary-limit instructions applicable to a particular appeal should be verified by their date and scope.

Official legislation and CBDT guidance

• Income-tax Act, 1961 - official consolidated text
• CBDT Circular No. 5/2024 - monetary-limit rules and exceptions
• CBDT Circular No. 9/2024 - revised monetary limits
• Income Tax Department - Appeals and Revisions (2025 Act and transition)

Updated: 27 October 2026. This article provides general statutory information and does not replace the text of applicable legislation, circulars or professional advice.