Low tax effect rule under CBDT circular barred Revenue appeals, with merits left open for another case.

Revenue appeals were dismissed for low tax effect because the tax effect fell below the revised monetary limit of Rs. 20 lakhs under CBDT Circular No. 3/2018. The circular was treated as applicable retrospectively to pending appeals, so the matters did not require adjudication on merits. The dismissal was expressly not an affirmation of the CIT(A)'s orders on the merits, and the question of law was left open for an appropriate case.

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Issues: Whether the Revenue's appeals were liable to be dismissed for low tax effect in view of CBDT Circular No. 3/2018 dated 11.07.2018.

Analysis: The tax effect in the appeals was below the revised monetary limit of Rs. 20 lakhs prescribed by CBDT Circular No. 3/2018. The circular was stated to apply retrospectively to pending appeals as well. In these circumstances, the appeals did not warrant adjudication on merits, and the question of law was left open for consideration in an appropriate case.

Conclusion: The Revenue's appeals were dismissed for low tax effect and the dismissal was not to be treated as affirmation of the orders of the CIT(A) on merits.

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