Low tax effect bar defeats Revenue appeal; CBDT monetary limit applies and no exception was available.

The Revenue's appeal was held not maintainable because the tax effect was below the CBDT monetary limit of Rs. 50 lakhs under Circular No. 17/2019, which enhanced the limits in Circular No. 3/2018 and applied to pending appeals. The Tribunal found that no exception in paragraph 10 of Circular No. 3/2018 applied. It also held that Circular No. 23/2019, read with the office memorandum dated 16.09.2019, was confined to bogus LTCG/STCL penny stock matters and did not extend to accommodation share application money cases. The appeal was dismissed on the ground of low tax effect.

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Issues: Whether the Revenue's appeal was not maintainable on account of low tax effect under the CBDT circulars, and whether any exception to the monetary limit applied.

Analysis: The tax effect in dispute was found to be below the prescribed monetary limit of Rs. 50 lakhs under Circular No. 17/2019 dated 08.08.2019, which enhanced the limits fixed by Circular No. 3 of 2018 dated 11.07.2018 and applied to pending appeals as well. The Tribunal held that the case did not fall within the exceptions in paragraph 10 of Circular No. 3 of 2018, and that the later Circular No. 23 of 2019 dated 06.09.2019, read with the office memorandum dated 16.09.2019, applied only to bogus LTCG/STCL penny stock and not to accommodation share application money cases.

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

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