TaxTMI 
TaxTMI 
2025 (12) TMI 1273
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.... as in Order passed under section 154 of the Act, and erred in directing the assessing officer ('AO") to verify the condition for claiming exemption under section 10(23FB) of the Act without issuing any show cause notice to the Appellant before passing of the appellate order under section 250 of the Act. 1.2. The Ld. CIT(A) erred in not allowing the opportunity of personal hearing through video conferencing inspite of being requested by the Appellant in writing during the submissions filed before the CIT(A) - NFAC. 1.3. The Ld. CIT(A) erred in not following the principle of Audi Alteram by not granting an effective opportunity of being heard before passing the order under Section 250 of the Act. 1.4 The Ld. CIT(A) ought to have issued a show cause notice and/ or allowed the Appellant's request for a hearing through video conferencing prior to adjudicating the issues under appeal. 1.5. In view of the above, the order passed by the Ld. CIT(A) without affording a fair and reasonable opportunity to the Appellant, thereby warranting its recall due to the procedural infirmity. 2. Ground No.2: Non-grant of exemption under section 10(35)....
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....trust deed and is registered as a close-ended Domestic Venture Capital Fund ("VCF') with Securities and Exchange Board of India ('SEBI') under the SEBI (Venture Capital Funds), Regulations, 1996 on 27 July 2011 and governed under section 115U read with section 10(23FB) of the Act. 3.3. Section 10(23FB) of the Act provides exemption in respect of any income of a venture capital company or venture capital fund from investment in a venture capital undertaking. 3.4. Clause (b) of section 10(23FB) defines a 'venture capital fund' as below: "venture capital fund" means a fund- (A) operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908), which- (i) has been granted a certificate of registration, before the 21st day of May, 2012, as a Venture Capital Fund and is regulated under the Venture Capital Funds Regulations; or (ii) has been granted a certificate of registration as Venture Capital Fund as a sub-category of Category I Alternative Investment Fund under the Alternative Investment Funds Regulations 3.5. In light of the submissions and documentary evidence furnished,....
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....ns instead states that VC continue to remain regulated by VCF regulation and migration of Venture Capital Fund to Alternative Investment Fund is not mandatory but at the discretion of the Fund. Further, the Ld. AO also erred in appreciating the fact that the amendment for migration of VCF has been introduced in 2024. Furthermore, the amendment of such migration was introduced only in 2024 and was not applicable during AY 2020-21 - the assessment year in question. 4.6. In view of the above, the AO ought to have granted the exemption under Section 10(23FB) of the Act, as the Appellant continues to qualify as a Venture Capital Fund registered under the SEBI (VCF) Regulations, 1996 and is therefore eligible for the exemption for the relevant year under consideration. 5. Ground No. 5: Erred in not deleting the levy of interest under section 234C of the Act 5.1. The Ld. CIT(A) failed to appreciate that, as per the provisions of the section 234C of the Act, interest is leviable only on the shortfall or failure to pay advance tax based on the returned income, and not on the assessed income. 5.2. The Ld. CIT(A) erred in upholding the action of the CPC in ....
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....he same amount in the schedule of exempt income. Thus, the learned AR submitted that even in the revised return of income, which forms part of the paper book from pages 77-152, the assessee only claimed an exempt income of Rs. 1,35,16,769/-, which was also an incorrect figure as the correct amount of exemption was to the tune of Rs. 1,65,59,461/-. The said revised return of income filed by the assessee was processed vide intimation dated 26.12.2021 computing the total income at Rs. 30,42,690/- as against Rs. Nil declared by the assessee in its return of income. The learned AR submitted that the said addition is nothing but the difference between the actual exemption of Rs. 1,65,59,461/- claimed by the assessee in its return of income in the Schedule of income from business or profession and the exempt income of Rs. 1,35,16,769/- as declared by the assessee in the Schedule of exempt income. The learned AR submitted that against the aforesaid intimation issued under section 143(1) of the Act, the assessee filed a rectification under section 154 of the Act, pointing out the correct exempt income earned by the assessee amounting to Rs. 1,65,59,461/- claimed as exempt under section 10(3....
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....Act only if it is proved that the appellant is not the category of VC fund for which exemption u/s 10(23FB) is not operational from A.Y. 2016-17 onwards. The appellant may be given due opportunity in this regard." 5. During the hearing, the learned AR, by referring to the relevant provisions of the Act, submitted that the assessee has been allowed exemption in other years under section 10(23FB) and section 10(35) of the Act, and for the year under consideration also, the assessee duly satisfies the conditions as laid down in the aforesaid provisions for claiming exemption. However, as noted in the foregoing paragraph, the learned CIT(A) rejected the plea of the assessee in the absence of requisite information. From the perusal of the impugned order, we find that the assessee specifically made a request before the learned CIT(A) for the grant of an opportunity of a personal hearing to explain the relevant grounds. During the hearing, the learned AR submitted that no opportunity of personal hearing through video conferencing was granted by the learned CIT(A). 6. We find that the Faceless Appeal Scheme, 2021, formulated by the Central Government in the exercise of powers conferr....