WIDER REPORTING OF INFORMATION COLLECTED BY INCOME TAX DEPARTMENT will be handy informative tool for assesse and return preparers if they take proper care.

[CA DEV KUMAR KOTHARI]

FORM 26AS and information in ‘my account’:

Readers are well aware of these informative reports and contents in my account. It is proposed to make wider information available to assessee through my account. Author hopes that wider information shall also be found in  form 26AS

Clauses in The Finance Bill 2020-

Helping hand in form of very informative and handy tool to assesses.

Amendment   proposed  are to insert a new section S.285BB which will  relate  to information pertaining to assesse,, collected by income tax department  to be made available to assesse in easy manner. This will help assesse to get information and to take care of the same while preparing his return of income. This will indeed be very helpful to unorganised assesses who do not maintain regular books of account and are casual in approach due to lack of knowledge and information, dependency on others, unorganised documentation which could lead to mistakes of omissions.

Taxpayer himself  must be careful to at least re- check such  information and must insist upon his return preparers to ensure that any information which is relevant is not left without proper treatment in accounts and while preparing reports and ITR. 

Existing S. 203AA will be omitted.

Proposed clauses:

Omission of section 203AA.

90. Section 203AA of the Income-tax Act shall be omitted with effect from the 1st day of June, 2020.

Insertion of new section 285BB.  Annual information statement.

101. After section 285BA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2020, namely:––

‘285BB. The prescribed income-tax authority or the person authorised by such authority shall upload in the registered account of the assessee an annual information statement in such form and manner, within such time and alongwith such information, which is in the possession of an income-tax authority, as may be prescribed.

   Explanation.––For the purposes of this section, “registered account” means the electronic filing account registered by the assessee in designated portal, that is, the web portal designated as such by the prescribed income-tax authority or the person authorised by such authority.’.

Notes on clauses

Rationalisation of provision relating to FORM 26AS 

Section 203AA of the Act, inter-alia, requires the prescribed income-tax authority or the person authorised by such authority referred to in sub-section (3) of section 200, to prepare and deliver a statement in FORM 26AS to every person from whose income, the tax has been deducted or in respect of whose income the tax has been paid specifying the amount of tax deducted or paid.

The FORM 26AS as prescribed in the Rules, inter-alia, contains the information about tax collected or deducted at source. However, with the advancement in technology and enhancement in the capacity of system, multiple information in respect of a person such as sale/purchase of immovable property, share transactions etc. are being captured or proposed to be captured. In future, it is envisaged that in order to facilitate compliance, this information will be provided to the assessee by uploading the same in the registered account of the assessee on the designated portal of the Income-tax Department, so that the same can be used by the assessee for filing of the return of income and calculating his correct tax liability.

As the mandate of FORM 26AS would be required to be extended beyond the information about tax deducted, it is proposed to introduce a new section 285BB in the Act regarding annual financial statement. This section proposes to mandate the prescribed income-tax authority or the person authorised by such authority to upload in the registered account of the assessee a statement in such form and manner and setting forth such information, which is in the possession of an income-tax authority, and within such time, as may be prescribed.

Consequently, section 203AA is proposed to be deleted.

These amendments will take effect from 1st June, 2020. 

[Clauses 90]         ( per author: IT SHOULD BE Clauses 90 and 101)

Earlier articles about care to be taken by assesse:

Author recall a case in which assesse who   missed to include salary income from one of his employer ( he worked for two employers during previous year and did not inform new employer about salary earned form Ex-employer)  in his income disclosed , although the salary from previous employer was subjected to TDS and was included TDS returns by employers and also  in FORM 26AS. This lead to levy of penalty u.s. 271.1.c which was confirmed by High Court also. If he has taken care to see FORM 26AS, this could be avoided.

Penalty for concealment of income Under Section 271(1) (c)

An Article By: - C.A. DEV KUMAR KOTHARI

August 17, 2011  discussing judgment in case of:

Shri Pankaj Rathi Versus Commissioner of Income-Tax (Appeals), XXXVII. 2011 -TMI - 204887 - CALCUTTA HIGH COURT

TAKE CARE OF YOUR TRANSACTIONS WHICH ARE TO BE REPORTED BY OTHERS IN ANNUAL INFORMATION AND REPORTABLE TRANSACTIONS REPORT UNDER S.285BA OF INCOME TAX ACT

An Article By: - CA DEV KUMAR KOTHARI

May 23, 2017

In action on part of assessee can be costly in assessment and penalty proceedings- learning from recent ruling.

An Article By: - C.A. DEV KUMAR KOTHARI

June 17, 2011