Consider the following statements : Statement-I : Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is exempted from tax, but the dividend is taxable. Statement-II : InvITs are recognized as borrowers under the 'Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002'. Which one of the following is correct in respect of the above statements?

Statement-I is incorrect because interest income distributed by InvITs to unit-holders is generally taxable at the applicable slab rates, not exempted; Statement-II is correct as the SARFAESI Act was amended in 2021 to recognize InvITs as "borrowers," allowing lenders to initiate recovery proceedings against them. Option (c) is the most tempting wrong choice for those who mistake the "pass-through" status of InvITs for a total tax exemption, whereas in reality, the tax liability often shifts from the trust to the individual investor. The core concept tested is the regulatory and fiscal framework of pooled investment vehicles, specifically the taxation of returns and their legal standing under debt recovery laws.