Low tax effect under CBDT appeal limits made the departmental appeal not maintainable and led to dismissal.

Revenue's appeal was held not maintainable because the tax effect was below the monetary limit prescribed in the CBDT circular governing departmental appeals. The Tribunal noted that the circular bars filing of appeals where the tax effect does not exceed the specified threshold unless an exception applies, and no exception was shown to exist. The Department also did not controvert the assessee's computation of tax effect. On that basis, the appeal was dismissed as barred by the low tax effect limit.

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Issues: Whether the Revenue's appeal was maintainable in view of the low tax effect under the CBDT circular governing monetary limits for departmental appeals.

Analysis: The tax effect involved in the appeal was stated to be below the monetary limit prescribed for appeals before the Tribunal. The circular relied upon by the Tribunal mandated that departmental appeals not be filed where the tax effect does not exceed the specified limit, and the exception clauses were not shown to apply. The Department did not controvert the assessee's computation of tax effect.

Conclusion: The appeal was not maintainable on account of low tax effect and was liable to be dismissed.

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