Low tax effect under CBDT circulars bars revenue appeal; DGIT Investigation information is not an external source exception.

Revenue appeals below the monetary limit prescribed by CBDT Circular No. 17/2019, which enhanced the threshold in Circular No. 3/2018 and applied to pending matters, are not maintainable and must be dismissed even if the merits are otherwise arguable. Information received from DGIT (Investigation) was held not to fall within the circular exception for cases based on an external source, because DGIT (Investigation) operates within the CBDT investigation wing. The appeal was therefore dismissed on low tax effect grounds without adjudication on the addition.

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Issues: Whether the revenue appeal was liable to be dismissed in view of the low tax effect under CBDT circulars, and whether information from DGIT (Investigation) attracted the exception for appeals based on external sources.

Analysis: The tax effect involved was below the monetary limit prescribed by Circular No. 17/2019 dated 08.08.2019, which enhanced the threshold fixed by Circular No. 3/2018 dated 11.07.2018 and applied to pending appeals as well. The plea that the case fell within the exception for information from an external source was rejected, as DGIT (Investigation) functions under the investigation wing of CBDT and is not an external source within the meaning of the circular.

Conclusion: The revenue appeal was not maintainable on the basis of low tax effect and was dismissed.

Final Conclusion: The dispute was disposed of on a purely monetary threshold ground, without adjudication on the merits of the addition.

Ratio Decidendi: Where the tax effect is below the prescribed monetary limit, an appeal by the revenue is to be dismissed notwithstanding the merits, and internal investigation information of CBDT does not constitute an external source for the exception.

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