Report by assessee (general companies and tax audit parties) for FY 2016-17 to be furnished by 31st May 2017 – presented in relevant and simplified manner

[CA DEV KUMAR KOTHARI]

Relevant links and references:

Section 285BA of Income-tax act, 1961

Relevant Rule 114E

 Form 61A

Scope of this write-up:

In this write-up requirement of reporting by general assessee who are required to obtain Tax Audit Report and also companies who have issued shares or debenture etc. is covered. Reporting requirements by banks, mutual funds, NBFC, registration authorities, foreign exchange dealers, etc. are omitted for simplification in understanding by general assesses and tax practioners.

Relevant portion of Rule is reproduced as far as it apply to general assessee (general company and other assessee who are required to get accounts audited u/s 44AB.)

Reporting requirements of other have been omitted for sake of simplicity. However, reports submitted by them can have a bearing on any assessee, if he has entered into a transaction reportable by them. Therefore, those reporting aspects should also be kept in mind because based on reports of such other persons, enquiry can be initiated against any assessee. In relation to reported transactions. Therefore, for each assessee / client it is necessary to ascertain transactions which are likely to be reported by other reporting entities.

Readers are requested to keep track of development regarding reporting requirements as there can be some changes from time to time. Time is very short so steps should be taken for timely submission of report of reportable transactions.

Rule 114E as far as applicable to general companies and assessee who are required to obtain Tax Audit Report is reproduced below:

[114E. Furnishing of statement of financial transaction.-

(1) The statement of financial transaction required to be furnished under sub-section (1) of section 285BA of the Act shall be furnished in respect of a financial year in Form No. 61A and shall be verified in the manner indicated therein.

(2) The statement referred to in sub-rule (1) shall be furnished by every person mentioned in column (3) of the Table below in respect of all the transactions of the nature and value specified in the corresponding entry in column (2) of the said Table in accordance with the provisions of sub-rule (3), which are registered or recorded by him on or after the 1st day of April, 2016, namely:-

TABLE

Sl.No.	Nature and value of transaction	Class of person (reporting person)
(1)	(2)	(3)
6.	Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company.	A company issuing shares.
7.	Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ten lakh rupees or more in a financial year.	A company listed on a recognised stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 (18 of 2013).
11.	Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. No. 1 to 10 of this rule, if any.	Any person who is liable for audit under section 44AB of the Act.

(4)(a) The return in Form No. 61A referred to in sub-rule (1) shall be furnished to the Director of Income-tax (Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence and Criminal Investigation) through online transmission of electronic data to a server designated for this purpose under the digital signature of the person specified in sub-rule (7) and in accordance with the data structure specified in this regard by the Principal Director General of Income-tax (Systems):

 (5) The statement of financial transactions referred to in sub-rule (1) shall be furnished on or before the 31st May, immediately following the financial year in which the transaction is registered or recorded.

 (6) (a) Every reporting person mentioned in column (3) of the Table under sub-rule (2) shall communicate to the Principal Director General of Income-tax (Systems) the name, designation, address and telephone number of the Designated Director and the Principal Officer and obtain a registration number.

(b) It shall be the duty of every person specified in column (3) of the Table under sub-rule (2), its Designated Director, Principal Officer and employees to observe the procedure and the manner of maintaining information as specified by its regulator and ensure compliance with the obligations imposed under section 285BA of the Act and rules 114B to 114D and this rule.

Explanation 1.- "Designated Director" means a person designated by the reporting person to ensure overall compliance with the obligations imposed under section 285BA of the Act and the rules 114B to 114D and this rule and includes-

(i) the Managing Director or a whole-time Director, as defined in the Companies Act, 2013 (18 of 2013), duly authorised by the Board of Directors if the reporting person is a company;

(ii) the managing partner if the reporting person is a partnership firm;

(iii) the proprietor if the reporting person is a proprietorship concern;

(iv) the managing trustee if the reporting person is a trust;

(v) a person or individual, as the case may be, who controls and manages the affairs of the reporting entity if the reporting person is, an unincorporated association or, a body of individuals or, any other person.

Explanation 2.- “Principal Officer” means an officer designated by the reporting person referred to in the Table in sub-rule (2).

Explanation 3.- “Regulator” means a person or an authority or a Government which is vested with the power to license, authorise, register, regulate or supervise the activity of the reporting person referred to in the Table in sub-rule (2).

(7) The statement of financial transaction referred to in sub-rule (1) shall be signed, verified and furnished by the Designated Director specified in sub-rule (6):

Provided that where the reporting person is a non-resident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director]

  (3) The [return or statement ] referred to in sub-rule (1) shall be furnished to the ¹[Director of Income-tax (Central Information Branch)]:

Provided that where the Board has authorised an agency to receive such [return or statement ] on behalf of the [Director of Income-tax (Central Information Branch)], [return or statement ] shall be furnished to that agency.

(4)(a) The [return or statement ] comprising Part A and Part B of Form No. 61A referred to in sub-rule (1) shall be furnished on computer readable media being a floppy (3.5 inch and 1.44 MB capacity) or CD-ROM (650 MB or higher capacity) or Digital Video Disc (DVD), along with Part-A thereof on paper.

Provided that a person responsible for furnishing the ³[return or statement] , may, at his option, furnish the ³[return or statement] through online transmission of electronic data to a server designated by the ⁴[ Annual Information Return or Statement of Financial Transaction- Administrator ] referred to in sub-rule (7) for this purpose under the digital signature of the person specified in sub-rule 6:

Provided further that the [return or statement] shall be prepared in accordance with the data structure specified by the [ Annual Information Return or Statement of Financial Transaction- Administrator ] referred to in sub-rule (7) in this regard;

(b) The person responsible for furnishing the ⁵[ return or the statement ] shall ensure that

          (i)       if the data relating to the return or statement is copied using data compression or backup software utility, the corresponding software utility or procedure for its decompression or restoration shall also be furnished along with the computer media return or statement;

          (ii)      the [ return or the statement ] is accompanied with a certificate regarding clean and virus free data.

Explanation.For the purposes of this sub-rule, digital signature means a digital signature issued by any Certifying Authority authorised to issue such certificates by the Controller of Certifying Authorities.

(5) The [return or statement ] referred to in sub-rule (1) shall be furnished on or before 31st August, immediately following the financial year in which the transaction is registered or recorded.

(6) The [return or statement ] referred to in sub-rule (1) shall be signed and verified by-

          (a)      in a case where the person furnishing the [return or statement ] is an assessee as defined in clause (7) of section 2 of the Act, by a person specified in section 140 of the Act;

          (b)      in any other case, by the person referred to in column (2) of the Table below sub-rule (2).

(7) The Board may appoint an officer designated as ⁶[ Annual Information Return or Statement of Financial Transaction ]-Administrator, not below the rank of the Commissioner of Income-tax for the purposes of day to day administration of furnishing of the ⁷[ Annual Information Return or Statement] including specification of the procedures, data structure, formats and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies."

Income-tax Act, 1961

²[Obligation to furnish statement of financial transaction or reportable account

     ‘285BA. (1) Any person, being-

     (a) an assessee; or   

     who is responsible for registering, or, maintaining books of account or other document containing a record of any specified financial transaction or any reportable account as may be prescribed, under any law for the time being in force, shall furnish a statement in respect of such specified financial transaction or such reportable account which is registered or recorded or maintained by him and information relating to which is relevant and required for the purposes of this Act, to the income-tax authority or such other authority or agency as may be prescribed.

     (2) The statement referred to in sub-section (1) shall be furnished for such period, within such time and in the form and manner, as may be prescribed.

     (3) For the purposes of sub-section (1), “specified financial transaction” means any-

     (a) transaction of purchase, sale or exchange of goods or property or right or interest in a property; or

     (b) transaction for rendering any service; or

     (c) transaction under a works contract; or

     (d) transaction by way of an investment made or an expenditure incurred; or

     (e) transaction for taking or accepting any loan or deposit,

     which may be prescribed:

     Provided that the Board may prescribe different values for different transactions in respect of different persons having regard to the nature of such transaction:

     Provided further that the value or, as the case may be, the aggregate value of such transactions during a financial year so prescribed shall not be less than fifty thousand rupees.

     (4) Where the prescribed income-tax authority considers that the statement furnished under sub-section (1) is defective, he may intimate the defect to the person who has furnished such statement and give him an opportunity of rectifying the defect within a period of thirty days from the date of such intimation or within such further period which, on an application made in this behalf, the said income-tax authority may, in his discretion, allow; and if the defect is not rectified within the said period of thirty days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, such statement shall be treated as an invalid statement and the provisions of this Act shall apply as if such person had failed to furnish the statement.

     (5) Where a person who is required to furnish a statement under sub-section (1) has not furnished the same within the specified time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such statement within a period not exceeding thirty days from the date of service of such notice and he shall furnish the statement within the time specified in the notice.

     (6) If any person, having furnished a statement under sub-section (1), or in pursuance of a notice issued under sub-section (5), comes to know or discovers any inaccuracy in the information provided in the statement, he shall within a period of ten days inform the income-tax authority or other authority or agency referred to in sub-section(1), the inaccuracy in such statement and furnish the correct information in such manner as may be prescribed.

     (7) The Central Government may, by rules made under this section, specify-

     (a) the persons referred to in sub-section (1) to be registered with the prescribed income-tax authority;

     (b) the nature of information and the manner in which such information shall be maintained by the persons referred to in clause (a); and

     (c) the due diligence to be carried out by the persons for the purpose of identification of any reportable account referred to in sub-section (1).]

 Relevant portion of Form 61A for general companies and assesses reuired to obtain report u/s 44AB

FORM No. 61A

[See rule 114E]

         Statement of Specified Financial Transactions under section 285BA(1) of the Income-tax Act, 1961

PART A: STATEMENT DETAILS

(This information should be provided for each Statement submitted together)

A.1  REPORTING ENTITY DETAILS
A1.1	Reporting entity name
A1.2	Income-tax Department Reporting Entity Identification Number
A1.3	Registration number
A.2 STATEMENT DETAILS
A.2.1	Statement Type	Insert 2 character code
A.2.2	Statement Number
A.2.3	Original Statement Id
A.2.4	Reason for correction	Insert 1 character code
A.2.5	Statement Date
A.2.6	Reporting Period
A.2.7	Report Types	Insert 2 character codes
A.2.8	Number of Reports
A.3 PRINCIPLE OFFICER DETAILS
A.3.1	Name
A.3.2	Designation
A.3.3	Address
A.3.4	City/Town
A.3.5	Postal Code
A.3.6	State Code	Insert 2 character code
A.3.7	Country Code	Insert 2 character code
A.3.8	Telephone
A.3.9	Mobile
A.3.10	Fax
A.3.11	Email

 

PART B:- REPORT DETAILS FOR AGGREGATED FINANCIAL TRANSACTIONS

B.1 REPORT NUMBER (To be provided for each person being reported)
B.1.1	Report Serial Number
B.1.2	Original Report Serial Number
B.2  PERSONAL DETAILS
B.2.1	Person Name
B.2.2	Person Type	Insert 2 character code
B.2.3	Customer Identity
B.2.4	Gender (for individuals)	Insert 1 character code
B.2.5	Father's Name (for individuals)
B.2.6	PAN
B.2.7	Aadhaar Number (for individuals)
B.2.8	Form 60 Acknowledgment
B.2.9	Identification Type	Insert 1 character code
B.2.10	Identification Number
B.2.11	Date of birth/Incorporation
B.2.12	Nationality/Country of Incorporation	Insert 2 character code
B.2.13	Business or occupation
B.2.14	Address
B.2.15	Address Type	Insert 1 character code
B.2.16	City / Town
B.2.17	Postal Code
B.2.18	State Code	Insert 2 character code
B.2.19	Country Code	Insert 2 character code
B.2.20	Mobile/Telephone Number
B.2.21	Other Contact Number
B.2.22	Email
B.2.23	Remarks

 

 

B.3 FINANCIAL TRANSACTION SUMMARY
B.3.1	Product Type	Insert 2 character code
B.3.2	Aggregate gross amount received from the person
B.3.3	Aggregate gross amount received from the person in cash
B.3.4	Aggregate gross amount paid to the person
B.3.5	Remarks
B.4 FINANCIAL PRODUCT DETAILS (To be provided for each distinctive product)
B.4.1	Product Identifier
B.4.2	Last Date of Transaction
B.4.3	Aggregate gross amount received from the person
B.4.4	Aggregate gross amount received from the person in cash
B.4.5	Aggregate gross amount paid to the person
B.4.6	Related Account Number
B.4.7	Related Institution Name
B.4.8	Related Institution Ref Number
B.4.9	Remarks

PART C:   xxx 

PART D:  xxx  

C.3  ACCOUNT SUMMARY

C.3.1	Aggregate gross amount credited to the account in cash
C.3.2	Aggregate gross amount debited to the account in cash
C.3.3	Remarks