Low tax effect appeals cannot bypass CBDT circulars unless the audit objection exception is properly proved.

An income tax appeal below the prescribed tax-effect limit was held not entertainable because the Department failed to show that the revenue audit objection exception under the CBDT circulars was actually satisfied. A mere oral assertion that an audit objection existed was insufficient to bypass binding circulars, and no record was produced to prove acceptance of the objection. The appeal was therefore disposed of in accordance with the circulars, with the claimed exception not established.

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Issues: Whether the income tax appeal could be entertained despite the low tax effect on the basis of the audit objection and the exceptions contained in the CBDT circulars.

Analysis: The tax effect was below the monetary limit. The exception relating to revenue audit objection could apply only if the Department showed that the objection had been accepted. No such record was produced. Binding circulars could not be bypassed by a mere oral assertion that an audit objection existed.

Conclusion: The appeal was not entertainable and was disposed of in view of the CBDT circulars, with the audit objection exception not established.

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