CBDT may direct quick disposal of appeals from 300 firms having demand orders
About 300 start-ups which had received tax payment orders due to issues related to ‘angel tax’ may soon get relief, as the Central Board of Direct Taxes (CBDT) has asked industry representatives to submit the names and PAN details of all the affected start-ups.
Though the government, earlier this week notified the new rules pertaining to angel tax that exempted registered start-ups of a specified size from the tax, and any scrutiny to do with its applicability, it did not address the issues of start-ups that had already received assessment orders. Once the list is handed over, the CBDT, which met industry representatives on Friday, may issue directives to its officers for “expeditious disposal of appeals.”
“We have requested the CBDT to consider issuing exemption certificates to start-ups having a demand order/in appeal,” Sachin Taparia, founder and chairman of LocalCircles, who was part of the meeting
He added that the CBDT had requested them for the PAN details and names of all start-ups having orders and LocalCircles, along with industry think-tank iSPIRT, would submit the same early next week.
Mr. Taparia added that industry representatives have recommended that, “In case, the demand has been levied against Section 56 (2) (vii-b) and the start-up has furnished its Startup India exemption certificate, it should be deemed as satisfactory explanation as long as it is within the limits stated in the DPIIT notification.”
In case the demand had been levied against Section 68 of the I-T Act and the start-up had furnished the details of the investors together with the PAN of the investor and its Startup India exemption certificate, it should be deemed as satisfactory explanation, he said.
“Due to the sensitive nature of the documents [bank statements, income tax returns and financial statements], concerning creditworthiness and genuineness of the investor, many are reluctant to submit it to the start-up, but are willing to submit it directly to the assessing officer,” Mr. Taparia explained.