Deemed consent under SICA requires service on the designated nodal authority, not merely the Assessing Officer.

For rehabilitation schemes seeking tax concessions under SICA, deemed consent under section 19(2) depends on valid service of the Draft Rehabilitation Scheme on the authority designated by the applicable CBDT circular to represent the Central Government. Service only on an Assessing Officer, without proof that the designated nodal authority received the scheme or was duly authorised to act, is insufficient for deemed consent. The text also notes that the separate issue concerning section 115JB of the Income-tax Act was not finally determined and required reconsideration by the BIFR. The practical effect is that compliance with the prescribed service route is essential before a sanctioned scheme can bind the Income Tax Department.

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Issues: Whether circulation of the Draft Rehabilitation Scheme to the Assessing Officer of the Income Tax Department amounted to valid service on the Central Government for the purpose of deemed consent under section 19(2) of the Sick Industrial Companies (Special Provisions) Act, 1985, and whether the sanctioned scheme could bind the Income Tax Department in the absence of service on the designated nodal authority.

Analysis: The circular issued by the Central Board of Direct Taxes provided that the Director General of Income Tax (Admn.) was the nodal agency for coordination between the BIFR and the CBDT in matters involving reliefs and concessions under the Direct Tax Laws. The scheme had been circulated to the Assessing Officer, but the record did not show dispatch to the Director General of Income Tax (Admn.) or the Secretary, CBDT, though both were shown as addressees in the mailing list. The Court held that, for a deemed consent consequence under section 19(2), service had to be effected on the authorized authority designated by the circular. Service on a different departmental officer, without proof of onward intimation or valid authorization to act on behalf of the Central Government, was insufficient. The Court also noted that the additional contention based on section 115JB of the Income-tax Act, 1961 required reconsideration by the BIFR and was not decided finally on merits.

Conclusion: Deemed consent under section 19(2) could not be sustained on the basis of service only on the Assessing Officer; valid service had to be on the designated nodal authority, and the impugned orders were liable to be set aside.

Final Conclusion: The matter was sent back for fresh consideration by the BIFR on the limited question of the impugned clause in the rehabilitation scheme.

Ratio Decidendi: For a scheme involving tax concessions under SICA, deemed consent cannot arise unless the Draft Rehabilitation Scheme is served on the authority designated by the applicable CBDT circular to act for the Central Government.

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