Problem comparing ADC value in assembly

Hello all. I'm writing a code to compare incoming ADC value to check if it is greater than 2.5V (which maps to 1000 in ADC value and is equal to 0x03E8 in hex). I'm using 2.56V internal Vref, and using CPI instructions to compare ADCH with 0x03 and ADCL with 0xE8. But the code isn't working, it seems to be logically right.

You've got a return and without a call.

SET_AND_UNSET_PBS has RET at the end of it, so you should replace the RET with RJMP READ_ADC

Alternatively, you could call SET_AND_UNSET_PBS instead of jumping to it, and then have a jump to READ_ADC after that.

You code should be OK if the largest possible value of ADCH is 3. However, the code won't work if ADCH can be a larger value, or if you ever want to compare with a value of 0x2FF or less.

When performing a two-byte compare, it's normal to compare the high byte first. However there are really 3 outcomes to that.
high byte is smaller -> result is smaller
high byte is the same -> compare the next byte
high byte is larger -> result is larger

Your code is grouping the same and larger together, and treating them as though the high byte is the same. If the high byte can ever be larger than 3, or you want to compare with a smaller number, you code will only work for some results.

On a hardware point, if you are applying more than the reference voltage to the ADC pin, you need to check how the ADC behaves in that condition.