Obligation to furnish statement of financial transaction or reportable account [Section 285BA] – Income Tax

Obligation to furnish statement of financial transaction or reportable account [Section 285BA] :

(i) Section 285BA imposes an obligation on specified persons to furnish statement of financial transaction or reportable account. Thus, the new section also provides for furnishing of statement by a prescribed reporting financial institution in respect of a specified financial transaction or reportable account to the prescribed income-tax authority.

(ii) As per section 285BA(1), the following persons, who are 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, are required to furnish a statement in respect of such specified financial transaction or reportable account which is registered or recorded or maintained by him and information relating to which is relevant and required for the purposes of the Income-tax Act, 1961 to the income-tax authority or such other authority or agency as may be prescribed –

(a) an assessee;

(b) a prescribed person in the case of an office of Government;

(d) the Registrar or Sub-Registrar appointed under the Registration Act, 1908; or

(e) the registering authority empowered to register motor vehicles under the Motor Vehicles Act, 1988; or

(f) the Post Master General referred to in the Indian Post Office Act, 1898; or

(g) the Collector referred to in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; or

(h) the recognised stock exchange referred to in the Securities Contracts (Regulation) Act, 1956; or

(i) an officer of the Reserve Bank of India; or

(j) a depository referred to in the Depositories Act, 1996; or

(k) a prescribed reporting financial institution.

(iv) “Specified financial transactions” means any of the following transactions which may be prescribed –

(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

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

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

(v) The CBDT may prescribe different values for different transactions in respect of different persons having regard to the nature of such transaction. Further, 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 Rs 50,000.

(vi) The statement of financial transaction or reportable account should be in the prescribed form and manner and furnished within the prescribed time.

(vii) Where the prescribed income-tax authority considers that the statement furnished under section 285BA(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 30 days from the date of such intimation. The prescribed income-tax authority may allow, on an application made in this behalf, a further period of time, at his discretion.

(viii) If the defect is not rectified within the said period of 30 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. Consequently, the provisions of this Act shall apply as if such person had failed to furnish the statement.

(ix) Where a person who is required to furnish a statement under section 285BA(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 [Section 285BA(5)].

(x) If any person, having furnished a statement under section 285BA(1), or in pursuance of a notice issued under section 285BA(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 section 285BA(1), the inaccuracy in such statement and furnish the correct information in the prescribed manner [Section 285BA(6)]

(xi) Under section 285BA(7), the Central Government may, by way of rules, specify —

(a) the persons referred to in section 285BA(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 section 285BA(1).

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