Cumulative tax effect under the monetary-limit circular applies to multiple disputed additions when no cross objections are filed.

For applying the monetary-limit circular, tax effect is to be computed cumulatively on all disputed additions where the Revenue challenges deletion of multiple additions, rather than ITA-wise for each appeal separately. The definition of "tax effect" in paragraph 4 requires comparison between tax on assessed income and tax that would have been chargeable if the disputed income were excluded. Paragraph 12, which concerns cross objections, does not apply where no cross objections have been filed. On that basis, the assessee's objection to maintainability was rejected and the Revenue's appeals were held maintainable.

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Issues: Whether, for applying the monetary limit under Circular No. 3/2018, the tax effect in the Revenue's appeals had to be computed cumulatively on all disputed additions or only ITA-wise in relation to the particular appeal; and whether paragraph 12 of the Circular, dealing with cross objections, was applicable.

Analysis: The expression "tax effect" in paragraph 4 of the Circular refers to the difference between the tax on the assessed total income and the tax that would have been chargeable if the disputed income were excluded. The Revenue's grievance was against deletion of all additions made by the Assessing Officer, and no cross objections had been filed before the Tribunal. In that situation, paragraph 12 had no application. The relevant computation therefore had to be made on a cumulative basis for the disputed additions, rather than confined to each ITA separately.

Conclusion: The respondent assessee's objection to maintainability was rejected, and the appeals were held to be maintainable on the basis of cumulative tax effect.

Ratio Decidendi: For purposes of the monetary-limit circular, where the Revenue challenges deletion of multiple additions and no cross objections exist, tax effect is to be computed cumulatively under the definition in paragraph 4, and the cross-objection clause does not apply.

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