F.No. 173/ 14/2018-ITA-I

Government of India

Ministry of Finance

Department of Revenue (CBDT)

North Block, New Delhi,

Dated: 24^th December, 2018

To, All Principal Chief Commissioners of Income-tax

Madam/Sir

Subject: - Determination of fair market value of unquoted equity shares of 'Start Up' companies under section 56(2)(viib) of the Income-tax Act, 1961 read with Rule 11UA(2) of Income-tax Rules, 1962 -reg.

Vide letter of even number dated 06.02.2018 on the above mentioned subject, it was instructed by the CBDT that no coercive measures to recover the outstanding demand would be taken in case of 'Start Up', if additions have been made by the Assessing Officer under section 56(2)(viib) of the Income-tax Act, 1961( hereafter 'Act') after modifying/rejecting the valuation so furnished under Rule 11UA(2) of the Income-tax Rules, 1962.

2. Representations on similar lines have again been received. The matter is under consideration of the Board. In view of the same, undersigned is directed to state that no coercive measures to recover the outstanding demand should be taken in the matter till further instructions in this regard.

(Vinay Sheel Gautam)

Under Secretary (ITA-I), CBDT

 

F.No.275/29/2018(B)

Government of India

Ministry of Finance

Department of Revenue,

Central Board of Direct Taxes, New Delhi

Dated: 24th December, 2018

PRESS RELEASE

Exception from online filing of application under section 197 and 206C (9) in the cases of NRIs

and resident applicants

The Central Board of Direct Taxes has decided to allow exception from online filing of application under section 197 and 206C (9) in the cases of NRIs and resident applicants.

Vide Notification No. 74/2018 dated 25.10.2018, Rule 28 of the Income Tax Rules, 1962 was amended to prescribe electronic filing of application for lower deduction or no deduction under section 197 of Income Tax Act, 1961 using digital signature or EVC. Similar changes were also made in Rule 37G to prescribe electronic filing of application under section 206C (9) for lower or nil rate of tax collection at source (TCS). The functionality for online filing has since been made available by CPC-TDS through TRACES portal. Form No. 13 is the common form for application under section 197 and 206C (9).

For proper administration of the provisions of section 197 and 206C(9) and to remove genuine hardship being faced by certain applicants in filing online application in Form No. 13, the Central Board of Direct Taxes by virtue of the powers conferred under section 119(1) of the Income Tax Act has:

(i) allowed non-resident Indians (NRIs), who are not able to register themselves on TRACES, to file manual application in Form No. 13 before the TDS officer or in ASK Centers till 31.03.2019.

(ii) allowed resident applicants to file manual application in Form No. 13 before the TDS officer or in ASK Centers till 31.12.2018.

(Y. D. Sharma)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Click here to read and download CBDT Order u/s 119(1)

Ministry of Finance

Action against Illegal Operations of Shell Companies

Dated: 21 Dec 2018

            The term ‘shell company’ has not been defined under the Income-tax Act, 1961 or under the Companies Act, 2013. However, the Special Task Force set up by the Government to look into the issue of shell companies has, inter alia, recommended the use of certain red flag indicators as alerts for identification of shell companies.

Further, section 248(1)(c) of the Companies Act, 2013 provides for removal of name of company from the register of companies, if it is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application for obtaining the status of a dormant company under section 455 of the Companies Act, 2013 within such period.

Accordingly, the Government has undertaken a special drive for identification and strike-off of companies by following due process of law. Around 2.26 lakhs companies were struck off from the register of companies in the first drive undertaken by the Government. Similarly, 1,00,150 companies were struck off in the second drive.

Further, 3.09 lakh directors were also disqualified under section 164(2)(a) read with Section 167(1) of the Companies Act, 2013 for non-filing of Financial Statements or Annual Returns for continuous period of three financial years by the companies.

Central Bureau of Investigation (CBI) has registered 91 cases against 632 shell companies during the last 3 years (2015, 2016 and 2017) and 2018 (up to 30.11.2018).

This was stated by Shri Ship Pratap Shukla, Minister of State for Finance in a written reply to a question in Lok Sabha today.

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RM/KA

 

Press Information Bureau 
Government of India
Ministry of Commerce & Industry

Dated : 19 DEC 2018

DIPP Clarification on IT Notice to Angel Investors/Start-ups

          The Department of Industrial Policy & Promotion(DIPP) has taken notice of the news reports regarding issue of notices by Income Tax authorities to Angel Investors/Start-ups.

          DIPP in consultation with the Department of Revenue (DoR) has put in place a mechanism since April 2018 to grant exemption from the provisions of Section 56(2)(viib) of the Income Tax Act to genuine investors in recognised start-ups.

          DIPP has again taken up this matter of issue of IT notices with the DoR so that there is no harassment of Angel Investors or Start-ups.Government is committed to protecting bona fide investments into start-ups.

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MM/SB

 

Click here to read and download ITAT order copy reported in [TS-9184-ITAT-2018(Pune)-O]

Editorial Note: [TS-6418-ITAT-2018(Bangalore)-O] : ITAT: Allows co-operative society’s Sec. 80P claim on interest income (on fixed, savings, current and other deposits); Distinguishes Totgars ruling - Bengaluru ITAT allows Sec. 80P benefit to assessee-society (engaged in providing credit facilities to the members) with respect to interest earned on deposits made in cooperative societies / banks during AYs 2011-12 and 2012-13; Accepts assessee’s stand that interest income earned by it by making the deposits in cooperative society / banks would be an activity relatable to its business and would therefore be eligible for Sec. 80P deduction; Distinguishes Revenue’s reliance.