Composite tax appeal and CBDT circular relief led to recall of withdrawal and restoration of the appeal.

An earlier withdrawal of a tax appeal was recalled because the appeal had been treated as involving only low tax effect, whereas it arose from a composite Tribunal order. Paragraph 5 of CBDT Circular No. 3/2018 permits maintenance of an appeal for the year in which the tax effect exceeds the prescribed monetary limit, even if another year in the composite order falls below that limit. Since the tax effect for the relevant assessment year exceeded the threshold, the withdrawal was found to be inadvertent and the appeal was restored to file.

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Issues: Whether the earlier order permitting withdrawal of the tax appeal was required to be recalled and the appeal restored on the ground that the appeal arose from a composite order and fell within paragraph 5 of CBDT Circular No. 3/2018.

Analysis: The order permitting withdrawal had been passed due to an inadvertent error in treating the appeal as one involving low tax effect alone. The appeal was in fact filed against a composite order of the Tribunal, and paragraph 5 of the CBDT circular permits an appeal to be maintained for the year in which the tax effect exceeds the prescribed monetary limit even where the tax effect for another year is below the limit. As the tax effect for the relevant assessment year exceeded the threshold, the earlier withdrawal could not stand.

Conclusion: The application was allowed, the order dated 27.11.2018 was recalled, and the tax appeal was restored to file.

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