Circular No . .22-I2019
/ Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi, dated the 3o~ugust,2019
Sub: Consolidated circular for assessment of Startups - reg.
In order to provide hassle-free tax environment to the Startups, a
series of announcements have been made by the Hon'ble Finance
Minister in her Budget Speech of 2019 and also on 23 rd August, 2019. To
give effect to these announcements, the Central Board of Direct Taxes
(CBDT) has issued various circulars/ clarifications in the matter. This
circular consolidates all these circulars and further clarifies as under:-
2. Assessment of Startups
The circular No. 16/2019 dated 7th of August, 2019 provided for
the following procedure for pending assessment of the Startups:-
1. In case of Startup companies recognized by Department for
Promotion of Industry and Internal Trade (DPIIT) which have
filed Form No. 2 and whose cases are under "limited scrutiny"
on the single issue of applicability of section 56(2)(viib) of the
Income-tax Act, 1961 (the Act),the contention of the assessee will
be summarily accepted.
ll. In case of Startup companies recognized by DPIIT which have
filed Form No. 2 and whose cases have been selected under
scrutiny to examine multiple issues including the issue of section
56(2)(viib)of the Act, this issue will not be pursued during the
assessment proceedings and inquiry on other issues will be
carried out by the Assessing Officer only after obtaining approval
of the supervisory authority.
Ill. In case of Startup Companies recognized by the DPIIT, which
have not filed Form No.2, but have been selected for scrutiny,
the inquiry in such cases also will be carried out by the Assessing
Officer only after obtaining approval of the supervisory
authorities.
3. Time limit for Completion of pending assessments of the
Startups
All assessment referred to in 2(i) should preferably be completed
by the AOs by 30th September, 2019. The assessments referred to in 2(ii)
& 2(iii) should be taken up on priority and should be preferably
completed by 31 st October, 2019.
4. Procedure for addition made U/S 56 (2)(vii b) in the past
assessment
The clarification issued on 9th August,2019 provided that the
provisions of the section 56(2)(viib) of the Act shall also not be
applicable in respect of assessment made before 19th February, 2019 if a
recognised Startups has filed declaration in Form No.2. The following
procedure is laid down with regard to addition made under section
56(2)(viib) of the Act in assessment order passed before 19 th February,
2019:-
1. In case the appeal against the assessment is pending before the
Commissioner of Income-tax (Appeal)[CIT(A)], the appellate
order should be passed by CIT(A) on or before 31 st December,
2019 after taking into account the fact that the Startup has filed
declaration in Form No. 2 and hence the provisions of section
56(2)(viib) of the Act are not applicable for the addition made
under section 56(2)(viib) of the Act before19 u1 February, 2019. The
Department shall not file further appeal on the issue of addition
made under section 56(2)(viib) of the Act;
ll. In case the case is pending before the IT AT, the Department shall
not press the ground relating to addition under section
56(2)(viib) of the Act in these cases.
5. Income-tax demand
It is reiterated that the outstanding income-tax demand relating to
additions made under section 56(2)(viib) shall not be pursued and no
communication with the assessee in respect of outstanding demand shall
be made for this purpose. In respect of other income-tax demand, it is
decided that the income-tax demand shall not be pursued unless the
demand is confirmed by the ITAT.
1EF --
6. Constitution of Startup cell
In order to redress grievances and to address various tax related
issues in the cases of Startups, a Startup Cell is constituted on 30th
August, 2019 with the following ex-officio members:-
S.No. Portfolio Designation Contact Number
1. Member (IT&C) Chairman 011-230982831
2. JS (TPL-II) Member 011-23092859
3. CIT (ITA) Member 011-23092837
4. Director (ITA-I) Member Secretary 011-23092107
5. Under Secretary (ITA-I) Member 011-23095479
7. The Cell, for any grievances/communications relating to Startups
may be approached at % Under Secretary, ITA-I, Room No. 245A,
North Block, New Delhi-11000l. Ph. No. 011-23095479/23093070 (F). The
Cell will also be accessible at startupcell.cbdt@gov.in.
8. Hindi version to follow.
~~~
(P~~j~ i''aramita)
Director (ITA-I)
(F.No. 173j149/2019-IT A-I)
Copy to:
1. PS to FM/OSD to FM/PS to MoS(R)/OSD to MoS(R)
2. PS to Secretary(Finance) / (Revenue)
3. The Secretary, DPIIT
4. The Chairman, CBDT & All Members, CBDT
5. All Pr.CCsIT/Pr.DGsIT, CBDT
6. All Joint Secretaries/ CsIT, CBDT
7. TheC&AG
8. The CIT(M&TP), Official Spokesperson of CBDT
9. 0/0 Pr.DGIT(Systems) with request to upload on the
departmental website
10.Addl.CIT, Data-Base Cell for uploading on IRS officer's
website
|
