Tax effect threshold under Income-tax circular bars Revenue appeals where liability is quantifiable and below the prescribed limit.

Revenue appeals under Section 260A of the Income-tax Act are barred by Circular No. 5/2024 where the tax effect is quantifiable and remains below the prescribed monetary limit. The Allahabad HC noted that the Assessing Officer had quantified the tax liability, so the dispute involved a measurable tax effect and did not fall within Clause 3.1(f), which applies only where tax effect is not quantifiable or not involved; the reference to Section 263 orders was treated as illustrative of that category. As the quantified tax effect was below the threshold and no exception applied, the appeal was not maintainable and was dismissed.

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Issues: Whether the Revenue's appeal under Section 260A of the Income-tax Act, 1961 was maintainable in view of Circular No. 5/2024 dated 15.03.2024, and whether the exception for cases where tax effect is not quantifiable applied to an order quashing proceedings under Section 263 of the Income-tax Act, 1961.

Analysis: The tax liability had been quantified by the Assessing Officer at Rs. 32,61,751, so the dispute involved a quantifiable tax effect. The exception in Clause 3.1(f) of the circular is attracted where tax effect is not quantifiable or not involved, and the reference to orders under Section 263 is illustrative of such situations. Since the quantified tax effect was below the prescribed monetary limit of Rs. 1 crore and no applicable exception was found to operate, the appeal was barred by the circular.

Conclusion: The appeal was not maintainable and was dismissed.

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