Circular No. 683

What it does

Records the withdrawal of the Board's Circular No. 523 dated 5-10-1988 and Circular No. 576 dated 31-8-1990, which had laid down the procedure for the Central Government's 'consent' to financial assistance under the direct tax laws in rehabilitation schemes for sick industries under the Sick Industrial Companies (Special Provisions) Act, 1985. They were withdrawn with immediate effect by the Board's letter of 30-12-1993, because section 19(2) of that Act - requiring all parties concerned with giving financial assistance to give their consent - had not been taken into account when they were issued. Each case of fiscal concession or financial assistance under the direct tax laws is now to be considered individually on merits for the purpose of that consent, and the Central Government's consent or refusal is conveyed to the Board for Industrial and Financial Reconstruction. The Director General of Income-tax (Administration) is made the nodal agency for coordination between that Board, the Appellate Authority for Industrial and Financial Reconstruction and the Central Board of Direct Taxes. Cases already decided under the two withdrawn circulars are not to be reopened.

Why it was issued

The two earlier circulars had been framed without regard to section 19(2) of the Sick Industrial Companies (Special Provisions) Act, 1985, which requires the consent of every party asked to give financial assistance.

Who it reaches

Sick industrial companies before the Board for Industrial and Financial Reconstruction
Companies seeking tax concessions as part of a rehabilitation scheme
Officers processing consent proposals for the Central Government

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.19	no counterpart recorded
s.80	s.121, s.138, s.139, s.140, s.141, s.142, s.143

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

SECTION 80 l LOSS - SUBMISSION OF RETURN FOR
Effect of order passed by Board for Industrial and Financial Reconstruction under scheme for rehabilitation of sick units on determination of losses
1. The Board had issued two circulars, Circular No. 523, dated October 5, 1988 (Annex I) and Circular No. 576, dated August 31, 1990 (Annex II) in connection with the procedure to be followed in respect of grant of ‘consent’ by the Central Government in cases involving financial assistance to be given under Direct Tax Laws for rehabilitating sick industries under Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
2. While issuing the two circulars, the provisions of section 19(2) of SICA were not considered. According to section 19(2), all parties concerned with giving ‘financial assistance’ for the rehabilitation scheme should give their ‘consent’.
3. The Board had withdrawn with immediate effect the above Circular Nos. 523 and 576 vide its letter of even numbers dated 30-12-1993. The said letter to AAIFR and BIFR clarified that each case of fiscal concession of ‘financial assistance’ under Direct Tax Laws will now be considered in each individual case on merits for the purpose of consent as contemplated in section 19(2) of SICA, 1985 and consent or denial of consent will be conveyed to BIFR by the Central Government. The modal agency for coordination between the Board for Industrial and Financial Reconstruction (BIFR) and, Central Board of Direct Taxes and Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and Central Board of Direct Taxes will be the Director General of Income-tax (Admn.), 7th Floor, Mayur Bhawan, New Delhi-110 001. Cases already decided in accordance with the Circular Nos. 523 and 576 were however, not required to be reopened.
Circular : No. 683, dated 8-6-1994.

What to watch

There is no general entitlement any more - consent turns on the merits of the individual case, and may be refused.
Cases already decided under Circular Nos. 523 and 576 stand; the withdrawal is not retrospective in that sense.
Proposals must be routed through the Director General of Income-tax (Administration) as the nodal agency.
The rehabilitation machinery under that Act has since been replaced, so the procedure described belongs to the regime then in force.

Where you meet it

In a rehabilitation scheme proposal seeking relief under the direct tax laws, and where the Department's consent under section 19(2) is in issue.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 5/2009 — Procedure for Representation Before Bifr and Aaifr 2 July 2009
Circular No. 623 — 71. Commutation of pension received by Judges of the Supreme Court and High Courts 6 January 1992
Circular No. 214 — Instructions for deduction of tax at source from salary during financial year 1977-78 at the rates specified in Part III 30 March 1977
Circular No. 107 — Financial Year 1973-74 7 March 1973
Circular No. 83 — Financial Year 1972-73 21 March 1972
Notification No. 53/2025 [F. No. 370142/16/2025-TPL] / GSR 356(E) — Ministry of Finance 30 May 2025

← Circular No. 684 · Circular No. 682 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is