Ashneer Grover, co-founder of fintech platform BharatPe, on Friday, took to X (formerly Twitter) to express his concerns regarding income tax notices being sent to several startups, including some in his own portfolio.
In his tweet, Grover stated that a few startups had received income tax notices asking them to furnish information about shareholders. The ex-Shark Tank India judge highlighted the part of the notice that asked startup companies to furnish three-year income tax returns (ITR) of all shareholders.
Grover wrote: "Bahut interesting hai (It's an interesting situation)- they are asking startup companies to furnish 3 year ITR of all shareholders. 1) How and why will companies have ITR of shareholders ! 2) Why would a shareholder/individual share their ITR with a private company ?"
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.— Ashneer Grover (@Ashneer_Grover) September 8, 2023
Bahut interesting hai - they are asking start-up companies to furnish 3 year ITR of all shareholders. 1) How and why will… pic.twitter.com/f48593uE4T
Grover questioned the rationale behind asking startups to come up with ITRs of shareholders. He was also apprehensive if an individual would want to provide details of his ITRs to a private company. Grover put forward the argument that a company does not provide loans to the shareholders, it is the shareholders who hold equity in the company.
He asked the finance ministry to look into the Income Tax Department's practice of asking for details of the ITRs of shareholders.
The entrepreneur also shared a copy of the IT department notice. The notice he shared asks for documents which include the shareholders' name, address, and PAN card, along with the number and shares allotted to the shareholders, the total value of the share allotted to the shareholders, and the payment received from each shareholder during the financial year.
The notice also asked start-ups to "provide documentary evidence to substantiate the identity and ITR of last 3 years of shareholders to substantiate creditworthiness of the shareholders as well as proof of genuineness of transaction."
Former Infosys Chief Financial Officer (CFO) TV Mohandas Pai also quoted Grover's post and stated that tax terrorism is increasing. Pai asked the PMO and Prime Minister Narendra Modi to intervene.