CBDT simplifies assessment process for recognized start-ups
Press Release, dated 10-08-2019
The Finance Ministry has simplified the process of assessment in the case of Start-up entities. It has been decided by the Central Board of Direct Taxes (CBDT) that:
a) In case of Start-up entities recognized by DPIIT which have filed Form No. 2, the contention of the assessee will be summarily accepted if cases are under “limited scrutiny” on the single issue of applicability of section 56(2)(viib),
b) In case of Start-up entities 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), the issue with respect to section 56(2)(viib) 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.
c) In case of Start-up entities 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.
d) Further, it has been also decided that in case where assessment order has been issued by the Assessing Officer before the release of DPIIT notification, a start-up will be eligible to claim the benefit of angel tax exemption if it fulfills the condition of eligible start-up (specified in the notification) and files the Form-2 subsequently with DPIIT.