INCOME TAX

Withdrawal of Circulars Nos. 523 and 576--New procedure for representation before Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction

Circular No. 683

Dated 8/6/1994

The Board had issued two circulars, Circular No. 523, dated October 5, 1988 (See [1988] 174 ITR (St.) 1), and Circular No. 576, dated August 31, 1990 (See [1990] 185 ITR (St.) 48), 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 the Direct Tax Laws for rehabilitating sick industries under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).

2. While issuing the two circulars, the provisions of section 19(2) of the 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 The Board had withdrawn with immediate effect the above Circulars Nos. 523 and 576, vide its letter of even number dated 30-12-1993. The said letter to AAIFR and BIFR clarified that each case of fiscal concession or "financial assistance" under the Direct Tax Laws will now be considered in each individual case on the merits for the purpose of consent as contemplated in section 19(2) of the SICA, 1985, and consent or denial of consent will be conveyed to BIFR by the Central Government. The nodal agency for co-ordination between the Board for Industrial and Financial Reconstruction (BIFR) and the Central Board of Direct Taxes and Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and the 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 Circulars Nos. 523 and 576 were, however, not required to be reopened.

4. The contents of this circular may be brought to the notice of all officers working under you.

(Sd.) K. Vasudevan,

Director (A&PAC),

Central Board of Direct Taxes.