Section 373: filing of appeal by an income-tax authority

Introduction

Section 373 permits the Board to set monetary limits for appeals filed by income-tax authorities. A decision not to appeal one case because of such an instruction does not concede the legal issue for another taxpayer or tax year.

Key takeaways

Monetary limits for departmental appeals

The Board may, from time to time, issue orders, instructions or directions to income-tax authorities, fixing monetary limits it considers fit, to regulate the filing of appeals by an income-tax authority under this Chapter.

Check the reason for a departmental non-appeal

Before inferring the Department's position on an issue, identify the applicable Board order, instruction or direction under Section 373(1), its monetary-limit rule, and the circumstances in which the appeal was not filed. The statutory rule concerns non-filing pursuant to those directions, not every possible decision not to appeal.

Section 373 does not itself set a permanent rupee limit. Any current limit must be verified from the applicable Board direction.

Not filing an appeal in one case does not bind the Department elsewhere

Where, following such orders/instructions/directions, an income-tax authority has not filed an appeal on an issue for one assessee in one tax year, this does not prevent that authority from filing an appeal on the same issue for the same assessee in a different tax year, or for a different assessee in the same or a different tax year.

Where no appeal has been filed under this mechanism, it is not lawful for an assessee (as a party to another appeal) to argue that the Department has "acquiesced" in the decision on that disputed issue simply because it did not appeal in another case.

The Appellate Tribunal or Court hearing such an appeal must have regard to the Board's orders/instructions/directions and the circumstances under which an appeal was or was not filed in the relevant case.

Step-by-step flow for applying Section 373

1. 1

   Has the Board issued orders, instructions or directions fixing monetary limits for filing appeals?

   Section 373(1) lets the Board fix such limits as it deems fit. The Act does not state the limits.

   • No: Section 373 has no effect on the decision to appeal.
   • Yes: Go to the next step.
2. 2

   Did the income-tax authority not file an appeal on an issue because of those limits?

   • No: Section 373(2) and (3) are not triggered, but under Section 373(4) the Tribunal or Court still has regard to the Board's directions and the circumstances in which the appeal was filed.
   • Yes: Go to the next step.
3. 3

   Is the authority now appealing the same issue for another tax year or for another assessee?

   Under Section 373(2), not appealing in one case does not stop the authority from appealing the same issue for the same assessee in another tax year, or for any other assessee in any tax year.

4. 4

   Is the assessee arguing that the authority accepted the decision by not appealing?

   Under Section 373(3), an assessee who is a party to an appeal cannot lawfully argue that the authority acquiesced in the decision on the disputed issue because no appeal was filed under the monetary limits.

5. 5

   How does the Tribunal or Court treat this?

   Under Section 373(4), the Appellate Tribunal or Court hearing the appeal must have regard to the Board's orders, instructions or directions and to the circumstances in which an appeal was or was not filed.

Practical checklist

Glossary

Monetary limit

A limit fixed by the Board under Section 373(1) to regulate when income-tax authorities file appeals. The Act does not state the amount.

Acquiescence

Accepting a decision by not challenging it. Section 373(3) bars an assessee from arguing this where no appeal was filed under the monetary limits.

Frequently asked questions