CBDT monetary limit applies to clubbed assessment years in a common order, requiring merits review before dismissal.

CBDT clarification on monetary limits under Instruction No. 1979 treats each assessment year as a separate case when considered singly, but where several assessment years are disposed of by a common order, the tax effect for those years may be clubbed. On that basis, if the combined tax effect exceeds the prescribed limit, the Revenue appeals remain maintainable and should not be dismissed solely for low tax effect without examining the merits.

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Issues: Whether the Revenue could club the tax effect of multiple assessment years disposed of by a common order for the purpose of the monetary limit prescribed in the CBDT instruction, and whether the Tribunal was right in dismissing the appeals solely on the ground of tax effect without examining the merits.

Analysis: The clarification issued by the CBDT to Instruction No. 1979 dated March 27, 2000 stated that the monetary limit in the context of each case taken singly would mean each assessment year for each assessee considered at one point of time. Where the appeals relating to several assessment years are disposed of by a common order, the tax effect for those years can be taken together. On the facts, the appeals related to four assessment years disposed of by a common order, and the combined tax effect exceeded the prescribed limit. The Tribunal therefore ought not to have dismissed the appeals merely on the monetary limit without a merits examination.

Conclusion: The dismissal of the Revenue appeals solely on the ground of tax effect was incorrect, and the appeals were maintainable when the assessment years were clubbed together for computing the monetary limit.

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