Annual Information Return u/s 285BA

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January 13, 2013Income TaxNo comments

(A) Section 285: A Brief on Annual Information Return

Any person being

  • an assessee; or
  • the prescribed person in the case of an office of Government; or
  • a local authority or other public body or association; or
  • the Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908; or
  • the registering authority empowered to register motor vehicles; or
  • the Post Master General; or
  • the Collector referred to in section 3(c) of the Land Acquisition Act, 1894; or
  • the recognized stock exchange referred to in section 2(f) of the Securities Contracts (Regulation) Act, 1956; or
  • an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934; or
  • a depository referred to in section 2(1)(e) of the Depositories Act, 1996,

shall furnish an Annual Information Return in respect of Specified Financial Transaction which is registered or recorded by him during any financial year commencing on or after 01.04.2004. Such obligation arises if such person is responsible for registering or maintaining books of accounts or other document containing record of any specified financial transaction under any law for the time being in force.

The Annual Information Return shall be furnished within the prescribed time after the end of such financial year in such form and manner including computer readable media as may be prescribed .

“Specified Financial Transaction” means any of the following transactions which may be prescribed by the Board:

  • transaction of purchase, sale or exchange of goods or property or right or interest in a property; or
  • transaction for rendering any service; or
  • transaction under a works contract; or
  • transaction by way of an investment made or an expenditure incurred; or
  • transaction for taking or accepting any loan or deposit.

The Board may prescribe different value for different transactions of different persons having regard of the nature of such transaction. Further the value or the aggregate value of such transactions during a financial year so prescribed shall not be less than Rs. 50,000.

Where the prescribed income tax authority consider that the annual information return furnished is defective  he may intimate the defect to the person who has furnished such return and give him an opportunity to rectify the defect within one month from the date of such intimation. On an application from such person further time can be granted. If the defect is not so rectified, such return shall be treated as an invalid return and the provisions of the Act shall apply as if such person has failed to furnish the annual information return.

Where a person fails to furnish an annual information return within the prescribed time, the prescribed income tax authority may serve upon such person a notice requiring him to furnish such return within such time not exceeding 60 days from the date of service of notice. Then such person shall furnish the annual information within the time prescribed in the notice.

(B) Persons required to furnish Annual Information Return u/s 285BA read with Rule 114E

S.no Class of Persons Nature and Value of Transactions
1 Banking Company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of the Act) Cash deposits aggregating to Rs. 10 Lakhs or more in a year in any savings account of a person maintained in that bank.
2 Banking Company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of the Act) or any other company or institution issuing credit card. Payment made by any person against bills raised in respect of a credit card issued to that person, aggregating to Rs.2 lakhs or more in the year.
3 A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Funds as may be duly authorized by the trustee in this behalf. Receipt from any person of an amount of Rs. 2 lakhs or more for acquiring units of that Fund.
4 A Company or institution issuing bonds or debentures. Receipts from any person of an amount of Rs. 5 lakhs or more for acquiring bonds or debentures issued by the company or institution.
5 A Company issuing shares through a public or right issue. Receipts from any person of an amount of Rs. 1 Laks or more for acquiring shares issued by the company.
6 Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908. Purchase or Sale by any person of immovable property valued at Rs. 30 lakhs or more.
7 A Person being an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934, who is duly authorized by the Reserve Bank of India in this behalf. Receipt from any person of an amount or amounts aggregating to Rs. 5 lakhs or more in a year for bonds issued by the Reserve Bank of India.

Time Limit for Filing Annual Information Return

Rule 114E (5) prescribes that AIR is to be furnished on or before 31st August, immediately following the financial year in which the transaction is registered or recorded in Form No. 61A

Form No. of Annual Information Return

Under rule 114E (1) and rule 114E (4) AIR is to be furnished in Form No. 61A on a computer readable media being a floppy (3.5 inch or 1.44 MB capacity) or CD-ROM (650 MB or higher capacity) or Digital Video Disc (DVD).

(C) Manner of Filing Annual Information Return

(i) TAN is the folio number

The person filing the AIR is required to quote his folio number in para 3 of Part A of Form 61A and para 4 of part B of Form 61A for filing the AIR. This folio number is the unique identity of the person filing the AIR for all purposes of AIR.

In the case of Government filers the TAN of the filer and in the case of non-government filers the TAN of the principal office of the person filing the AIR is the folio number.

(ii) One AIR Per Person

Persons filing AIR have to furnish only one Return even if they may have more than one branch.

The AIR is to be filed under the TAN of the principal office of the person filing the AIR.

(iii) Signing and Verification of AIR

The AIR should be signed and verified by the following persons as specified in rule 114E(6):

(a) In the case of an assessee, by a person authorized to sign a return under section 140 and

(b) In other cases, by a person specified in table below rule 114(E)(2).

(iv) Authority for accepting AIR

The AIR is required to be furnished to the Commissioner of Income Tax (Central Information Branch) under Rule 114 E (3). It is also provided under the rule that where the CBDT has authorized an agency to receive AIR on behalf of the Commissioner of Income Tax (Central Information Branch) the AIR shall be furnished to that agency.

The CBDT has authorized National Securities Development Corporation (NSDL) as the agency to receive AIRs on behalf of Commissioner of Income Tax (Central Information Branch).

AIR can be furnished with the facilitation centers of NSDL located in different parts of the country. The addresses of these facilitation centers are available on the website www.incometaxindia.gov.in and www.tin.nsdl.com.

(v) Certificate of Virus free data

The return is to be accompanied with a certificate regarding clean and virus free data.

(D) Penalty for Non-Filing /Late Filing of Annual Information Return

Section 271FA provides that if the specified person fails to furnish the AIR within the time prescribed, then the prescribed Income Tax Authority may impose a penalty of Rs. 100/- for every day during which the default continues. The penalty shall, however, not be levied if there is reasonable cause for the failure.

(E) Defective Return, Notice, Compliance

(a) Section 285BA (4): Notice for defective return

Where the prescribed Income Tax Authority considers that the Annual Information Return furnished under sub-section (1) is defective, he may intimate the defect to the person who has furnished such return and give him an opportunity of rectifying the defect within a period of one month from the date of such intimation or within such further period, the authority may grant on an application in this regard. If the person fails to rectify the defect within the time allowed, the prescribed income tax authority will treat the return as invalid and all the
provisions of this Act shall apply as if such person has failed to furnish AIR.

(b) Section 285BA(5): Compliance in response to notice

Where a person who is required to furnish an AIR has not furnished the same within the prescribed time, the prescribed Income Tax Authority may serve up on such person a notice requiring him to furnish such return within such period as laid down by such authority but not exceeding 60 days from the date of service of such notice.

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