Facts of the Case


The Revenue filed multiple appeals before the Income Tax Appellate Tribunal, Allahabad challenging the orders passed by the Commissioner of Income Tax (Appeals), Allahabad in respect of the block assessment period and subsequent assessment years concerning Mr. Denzil Richard Innis of St. John’s Co-Ed School, Allahabad.

At the time of hearing, none appeared on behalf of the assessee. The Tribunal proceeded to consider the maintainability of the departmental appeals in view of the tax effect involved.

It was found that the tax effect in each of the appeals was below ₹20 lakhs.

Issues Involved


  1. Whether the Revenue’s appeals were maintainable when the tax effect involved was below the monetary threshold prescribed by the CBDT.
  2. Whether CBDT Circular No. 3/2018 is applicable to pending appeals before the Tribunal.
  3. Whether the Tribunal should adjudicate the issues on merits despite low tax effect.

Petitioner’s Arguments (Revenue)


The Revenue contested the relief granted by the CIT(A) and sought adjudication of the issues raised in the appeals on merits before the Tribunal.

Respondent’s Arguments (Assessee)


No appearance was made on behalf of the assessee during the hearing. The Tribunal decided the matter based on the available material on record and applicable legal provisions.

Court Order / Findings


  • CBDT Circular No. 3/2018 dated 11 July 2018 prescribes that no appeal shall be filed before the Tribunal where the tax effect does not exceed ₹20 lakhs.
  • The circular is applicable to pending appeals.
  • The tax effect in the present appeals was below the prescribed monetary limit.
  • Instructions issued by the CBDT under Section 268A are binding on the Department.

The Tribunal relied upon the Supreme Court judgment in Navnit Lal Jhaveri vs. K.K. Sen (56 ITR 198), which established that beneficial circulars issued by the CBDT are binding on tax authorities.

Important Clarification

  • The dismissal was solely on account of low tax effect.
  • The Tribunal did not examine or decide the merits of the additions or legal grounds.
  • Such dismissal does not amount to affirmation of the CIT(A)’s order on merits.
  • The Department may pursue matters falling within exceptions to the prescribed monetary limits, if applicable.

 Link to download the order -https://itat.gov.in/public/files/upload/1545220150-DENZIL-209,%20275%20&%20276(TAX).pdf

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