Low tax effect appeals can be revived where Revenue audit objection exceptions under the CBDT circular were overlooked.

An earlier dismissal of the Revenue's appeal for low tax effect was treated as capable of rectification where para 10(c) of CBDT Circular No. 3/2018 had not been considered. The circular permits Revenue appeals to continue in cases arising from acceptance of Revenue audit objections even if the tax effect is below the monetary limit. That omission was regarded as an error apparent from the record under section 254(2), and the prior order was recalled for fresh consideration of the appeal on merits. The cited Calcutta High Court decision was distinguished because the relevant document had not been placed before the Tribunal.

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Issues: Whether the Tribunal's earlier order dismissing the Revenue's appeal on the ground of low tax effect could be recalled under section 254(2) of the Income-tax Act, 1961 for non-consideration of para 10(c) of CBDT Circular No. 3/2018 dated 11.07.2018 in a case involving acceptance of a Revenue audit objection.

Analysis: The earlier dismissal was founded on the tax effect being below the monetary limit prescribed in the circular. It was noticed that para 10(c) of the circular permits the Revenue to contest appeals arising from orders passed on acceptance of Revenue audit objections, even where the tax effect is below the prescribed limit. Since that aspect had not been taken into account while disposing of the appeal, the omission was treated as an error apparent from the record. The objection based on the cited Calcutta High Court decision was distinguished on the ground that, in that case, the relevant document had not been placed before the Tribunal.

Conclusion: The earlier order was held to be rectifiable under section 254(2) and was recalled for fresh consideration of the Revenue's appeal on merits.

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