Deputy Commissioner of Income Tax v. Sree Janardhana Mills

1. FACTS OF THE CASE

The mill resumed operations in August 1990 after an AAIFR order. For AY 1991-92 it claimed earlier losses and depreciation. CIT(A) and the Tribunal allowed the relevant carry-forward benefit by relying on CBDT Circular 523 of 5 October 1988; Revenue challenged the effect of its later withdrawal.

Source: PDF p. 1

2. DISCUSSION BY THE COURT

The Court treated the circular concession under section 119 as binding on departmental authorities while operative. It held that the later consent procedure described in Circular 683 could operate prospectively and could not retrospectively take away the benefit in this case.

Source: PDF p. 8

3. JUDICIAL DECISION

The substantial question was answered against Revenue and its appeal was dismissed without costs.

Source: PDF p. 8

4. OUTCOME

The appellate benefit for the assessee remained undisturbed under the earlier circular regime.

Source: PDF p. 8

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Identify the specific concession and time period

The decision concerns the historical sick-industry regime and Circulars 523, 576 and 683. It does not itself establish present-day entitlement to carry forward any company’s losses.

Source: PDF p. 5

Separate the quoted circular from the Court’s interpretation

The source reproduces scheme-related language in the earlier circular, then reasons that the later consent procedure cannot retrospectively remove the concession. Preserve that reasoning rather than describing an unlimited exemption from the Act.

Source: PDF p. 4

Do not silently regularize source inconsistencies

The opening question gives Circular 683 as 8 May 1994, while the body repeatedly uses 8 June 1994. Some precedent names are also printed imperfectly. The holding is reported from the operative paragraphs without treating these details as independently authenticated.

Source: PDF p. 8