CBDT low-tax-effect exception does not cover VAT Department information, so departmental appeal limits continued to apply.

ITAT Surat held that the CBDT low-tax-effect exception in para 10(e) of Circular No. 3/2018, as clarified on 20.08.2018, did not apply where reassessment was triggered by information from a State VAT Department. The Tribunal found that the exception is confined to the specified Central law enforcement agencies and does not extend to Sales Tax or VAT authorities. Applying coordinate bench decisions on the same issue, it concluded that the monetary limit for departmental appeals continued to govern. The Revenue's miscellaneous application seeking recall of the earlier dismissal was rejected, and the prior order remained undisturbed.

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Issues: Whether the Revenue's miscellaneous application seeking recall of the earlier order dismissing its appeal on low tax effect was maintainable on the ground that the case fell within the exception clause of the CBDT circular governing departmental appeals.

Analysis: The Tribunal held that the reassessment was initiated on information received from the VAT Department, a State authority, and not from the Central law enforcement agencies named in the exception clause. The Tribunal found that the exception in para 10(e) of Circular No. 3/2018 dated 11.07.2018, as clarified on 20.08.2018, did not extend to information from the Sales Tax or VAT Department. Following coordinate bench decisions taking the same view, the Tribunal concluded that the monetary limit for filing appeals continued to apply.

Conclusion: The Revenue's request for recall was rejected, and the miscellaneous application was dismissed.

Final Conclusion: The earlier dismissal of the Revenue's appeal on low tax effect was left undisturbed because the exception to the CBDT circular was held inapplicable to information received from the VAT Department.

Ratio Decidendi: The exception to the CBDT low-tax-effect circular applies only where the case falls within the specified Central law enforcement agency category, and it does not cover information received from a State VAT or Sales Tax Department.

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