Low tax effect bars Revenue appeal where Instruction No. 3/2011 applies to pending proceedings.

Revenue appeals were barred where the tax effect fell below the monetary limit prescribed in Instruction No. 3/2011, and the instruction was treated as applicable to pending proceedings as well. On that basis, the High Court held that the appeal could not be entertained for want of maintainability. The result was dismissal of the Revenue's appeal in favour of the assessee.

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Issues: Whether the Revenue's appeal was maintainable in view of the low tax effect and the binding nature of Instruction No. 3/2011 on pending proceedings.

Analysis: The tax effect involved in the appeal was below the prescribed monetary limit of Rs. 10,00,000/-. Instruction No. 3/2011 barred filing of appeals to the High Court where the tax effect was below that threshold, and the Court had already held that the instruction applied to pending proceedings as well. On that basis, the appeal could not be entertained.

Conclusion: The appeal was held to be not maintainable and was dismissed, which is against the Revenue and in favour of the assessee.

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