Low tax effect bar under CBDT appeal limits leads to dismissal of departmental appeal

Departmental income tax appeals were treated as barred where the assessed tax effect fell below the monetary limit prescribed by the CBDT circular. The circular dated 11-7-2018 was applied retrospectively, with the result that appeals not exceeding the threshold were not to be filed. On that basis, the High Court held the appeal not maintainable for low tax effect and dismissed it.

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Issues: Whether the income tax appeal was liable to be dismissed on account of low tax effect in view of the CBDT circular prescribing monetary limits for departmental appeals.

Analysis: The assessed tax effect was below the monetary limit applicable for appeals before the High Court. The circular dated 11-7-2018 was treated as applicable retrospectively, and departmental appeals were not to be filed where the tax effect did not exceed the prescribed threshold.

Conclusion: The appeal was dismissed as not maintainable on the ground of low tax effect.

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