The proviso to r. 9C(a) confers an enabling power on the Central Government to relax the requirement relating to achievement of prescribed production capacity or the time period for achieving the same, having regard to the genuine efforts made by the amalgamated company and the circumstances preventing achievement thereof; however, such power being in the nature of an exception cannot be exercised liberally and must be invoked reasonably, objectively and only to the extent necessary to advance the object of s. 72A, namely revival and continuation of the business of the amalgamating industrial undertaking. The benefit of carry forward of accumulated loss and unabsorbed depreciation under s. 72A is conditional and intended to prevent abuse by profitable companies amalgamating with loss-making entities merely for tax advantage without genuine revival of business. In the present case, despite extension sought by the assessee, the stipulated production level of 50% of installed capacity was not achieved even within the extended period and successive requests seeking reduction of the threshold capacity and further extension of time were made only on the basis of business difficulties. The Central Government, after considering the assessee’s efforts and circumstances, rejected the request for relaxation, and such decision could not be termed perverse or based on extraneous considerations. Where the scheme of amalgamation itself was aimed at simplification of corporate structure and maximisation of shareholder value, strict compliance with revival conditions assumed greater significance and the objective of s. 72A could not be extended to such restructuring absent achievement of prescribed operational revival. The Court held that the authority had exercised discretion in accordance with law and judicial review under Art. 226 was not warranted.