“In the last 1 month, a number of startups (a few in my portfolio as well) have received Income Tax notices asking to furnish information about shareholders… Request @FinMinIndia to please look at it,” he wrote.
Elevate Your Tech Process with High-Value Skill Courses
| Offering College | Course | Website |
|---|---|---|
| Indian School of Business | ISB Digital Transformation | Visit |
| Northwestern University | Kellogg Post Graduate Certificate in Product Management | Visit |
| Indian School of Business | ISB Professional Certificate in Product Management | Visit |
| Indian School of Business | ISB Applied Business Analytics | Visit |
He also posted a picture of the notice issued under Section 142 (1) of the Income Tax Act, which allows assessing officers (AOs) of the department to seek data from those filing the returns.
“Provide documentary evidence to substantiate the identity and ITR of last 3 years of shareholders to substantiate creditworthiness (of) the shareholders as well as the proof of genuineness of the transaction in respect of fresh credit of the share capital/premium account,” the notice said.
Responding to Grover’s post, the department said Section 68 of the Income Tax Act, under which the assessing officer has sought the information detailed in the notice, “places initial onus on the assessee-company to prove” the identity of the investor, creditworthiness of the investor and genuineness of the transaction.
Discover the stories of your interest
The department also said the details were sought to find out the source of investment by the shareholder, in addition to verifying if the amount invested was commensurate with the income shown in ITRs of the investors.
Grover also asked why the Income Tax department could not pull out the ITR data from its system by punching in the investors’ PAN numbers – to which the department replied: “If the PANs of the investors are shared with the AO by the Company, he can verify the ITRs of the investors.”
This is not the first time Grover has had a run-in with the tax authorities. The department sent him a notice in May under the Black Money Act, which Grover sought to quash via a writ petition in the Delhi High Court. However, on August 1, the court allowed Grover to withdraw the petition voluntarily and dismissed the plea.
