Low tax effect threshold bars departmental ITAT appeals below CBDT circular limit, making the appeal not maintainable.

CBDT Circular No. 3/2018 raised the monetary threshold for departmental appeals before the ITAT to Rs. 20 lakhs and applied it to pending as well as future appeals. Where the admitted tax effect in a Revenue appeal falls below that limit, the appeal is not maintainable and must be dismissed on the ground of low tax effect. The note applies this threshold rule to the Tribunal context and concludes that the Revenue's appeal could not proceed because the tax effect was below the prescribed limit.

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Issues: Whether the Revenue's appeal was liable to be dismissed on account of low tax effect under CBDT Circular No. 3/2018 dated 11-07-2018.

Analysis: The tax effect involved in the appeal was admitted to be below the monetary limit of Rs. 20 lakhs prescribed by the circular. The circular enhanced the threshold for departmental appeals before the Tribunal and was applicable to pending appeals as well as future filings.

Conclusion: The Revenue's appeal was not maintainable in view of the low tax effect and stood dismissed.

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