Tax appeal dismissed for assessment year 2008-2009 due to low tax effect without education cess.

The Tribunal dismissed the Revenue's appeal against CIT (A)'s order for assessment year 2008-2009 due to the tax effect being below Rs. 3 lakhs and not including education cess. The Tribunal held that tax effect should be calculated without including cess, following a judgment of the Hon'ble Delhi High Court. Consequently, the Revenue's appeal was deemed not maintainable and dismissed. The Cross Objection filed by the assessee in support of the CIT (A)'s order was also dismissed as a result.

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Issues involved: Appeal by Revenue and Cross Objection by assessee against CIT (A)'s order for assessment year 2008-2009 regarding tax effect below Rs. 3 lakhs.

Revenue's Appeal:
The Revenue filed an appeal against CIT (A)'s order, but the assessee argued that the tax effect was below Rs. 3 lakhs as per Board's Circular. The Revenue contended that the tax effect calculation by the assessee did not include education cess, making the tax effect exceed Rs. 3 lakhs. The assessee referred to a judgment of the Hon'ble Delhi High Court regarding the inclusion of cess in tax for section 43B of the Act. The Tribunal noted the Board's Instruction stating that the Revenue should not file appeals if the tax effect is below Rs. 3 lakhs. Considering the Delhi High Court's judgment, the Tribunal held that tax effect should be calculated without including cess. Consequently, the Revenue's appeal was deemed not maintainable and dismissed.

Cross Objection by Assessee:
The Cross Objection filed by the assessee was in support of the CIT (A)'s order. Since the Revenue's appeal was dismissed due to low tax effect, the Cross Objection by the assessee was also dismissed. Ultimately, both the Revenue's appeal and the Cross Objection of the assessee were dismissed by the Tribunal.

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