Petitioner is a trust and has been granted certificate of registration by SEBI as Venture Capital Fund and hence eligible for exemption u/s 10(23FB). AO adjusted refund for AY 2012-13 and 2014-15 against the demand of AY 2016-17.

Petitioner sought unconditional stay of the entire demand since the issue of petitioner’s claim for eligibility u/s 10(23FB) was already held by the CIT(A) for AY 2014-15 and by the tribunal for AY 2013-14.

Held –

As the issue stands concluded in favour of the petitioner by the orders of the appellate authorities as existing today in the petitioner’s own case. An unconditional stay of the demand for AY 2015-16 has been granted u/s 220(6).

Section 245 empowers the Revenue to set off or adjust the amounts to be refunded against any amounts remaining payable by the person concerned under the Act is a discretionary remedy. However, before the adjustment is done, intimation would u/s 245 of the Act to the party is mandatory. This intimation enable a party to point out any factual errors or any other development which would warrant non-adjustment of the refund against the demand payable for the consideration of the Assessing Officer.

This procedure laid down u/s 245 has been completely ignored by the Assessing Officer and also by the Pr. CIT.

The desire to collect more revenue cannot be at the expense of Rule of law.

Milestone Real Estate Fund Vs ACIT (Bombay High Court)

Writ Petition No. 543 of 2019