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2020 (11) TMI 273 - AT - Income TaxAssessment of Startups - Procedure for addition made u/s. 56(2)(viib) in the past assessment - Time limit for Completion of pending assessments of the Startups - HELD THAT:- 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 31st October, 2019. Addition made U/s. 56(2)(viib) - 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. 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 31st 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 before 19th February, 2019. The Department shall not file further appeal on the issue of addition made under section 56(2)(viib) of the Act; 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. 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. We are of opinion that the issue deserves to be remanded to Ld.CIT(A) to verify the issue in light of above circular. Ld.CIT(A) shall verify fulfilment of necessary criterias as required by the said circulars for its applicability to its fullest. Ld.CIT(A) is directed to grant proper opportunity of being heard to assessee in accordance with law. Ld. CIT(A) is also directed to pass reasoned order after carrying out necessary verification/investigations. Assessee is directed to file all requisite details/information is as called for by Ld. CIT(A) to consider the issue in light of the circulars.
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