Low tax effect and binding CBDT instruction rendered the departmental income-tax appeal non-maintainable.

A departmental income-tax appeal was held not maintainable because the tax effect fell below the monetary limit prescribed in the applicable CBDT instruction, and no stated exception applied. The binding nature of CBDT instructions on the Revenue under section 268A of the Income-tax Act was recognised, and the appeal was treated as having been filed in breach of that instruction. The Court therefore declined to examine the merits and dismissed the appeal on the ground of low tax effect.

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Issues: Whether the departmental appeal was liable to be dismissed for low tax effect in view of the CBDT instruction binding on the Revenue under section 268A of the Income-tax Act.

Analysis: The tax effect in the appeal was below the monetary limit prescribed in the applicable CBDT instruction, and the case did not fall within any stated exception. The binding nature of such instructions on the Revenue was recognized under section 268A of the Income-tax Act, and the appeal was found to have been filed in breach of that instruction. The Court therefore declined to examine the merits of the controversy.

Conclusion: The appeal was not maintainable and was dismissed on the ground of low tax effect and breach of the binding CBDT instruction.

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