Section 33B applied where the business of an industrial undertaking in India was discontinued in a previous year because of extensive damage to, or destruction of, its building, machinery, plant or furniture as a direct result of flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature; riot or civil disturbance; accidental fire or explosion; or enemy action or action taken in combating an enemy.
If the assessee re-established, reconstructed or revived the business within three years from the end of that year, it was allowed, in the year of revival, a rehabilitation allowance equal to sixty per cent of the deduction allowable to it under s. 32(1)(iii) for the damaged or destroyed assets. “Industrial undertaking” means one mainly engaged in generation or distribution of power, construction of ships, manufacture or processing of goods, or mining.
Operative consequences
The allowance was given only in the year of re-establishment, reconstruction or revival.
Undertakings formed by such re-establishment are expressly carved out of the “splitting up or reconstruction” bar in tax holiday provisions such as s. 10A, s. 10AA and s. 10B.
Status
The section is not operative for AY 2026-27. Its proviso states that no deduction “shall be allowed in relation to the assessment year commencing on the 1st day of April, 1985, or any subsequent assessment year”. The Finance Act, 2026 does not amend this section.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no provision in the Income-tax Act, 2025.
Function in the statutory architecture
Section 33B applied where the business of an industrial undertaking in India was discontinued in a previous year because of extensive damage to, or destruction of, its building, machinery, plant or furniture as a direct result of flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature; riot or civil disturbance; accidental fire or explosion; or enemy action or action taken in combating an enemy.
If the assessee re-established, reconstructed or revived the business within three years from the end of that year, it was allowed, in the year of revival, a rehabilitation allowance equal to sixty per cent of the deduction allowable to it under s. 32(1)(iii) for the damaged or destroyed assets. “Industrial undertaking” means one mainly engaged in generation or distribution of power, construction of ships, manufacture or processing of goods, or mining.
Operative consequences
Status
The section is not operative for AY 2026-27. Its proviso states that no deduction “shall be allowed in relation to the assessment year commencing on the 1st day of April, 1985, or any subsequent assessment year”. The Finance Act, 2026 does not amend this section.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject there is no provision in the Income-tax Act, 2025.