Wednesday 22 February 2017

Online verification on e-filling portals - related to cash transaction during demonetisation - CBDT issue a standard operating procedure (SOP) to verify such transactions


Online verification on e-filling portals - related to cash transaction during demonetisation -  CBDT issue a standard operating procedure (SOP) to verify such transactions.

Based upon vast amount of information of cash deposits collected and analysed by CBDT, a number of persons have been identified in whose case the cash transactions did not appear to be in line with their profile available with the Income-tax Department (‘ITO’) .

In such cases, it has been decided to undertake on -line verification of select transactions through jurisdictional Assessing Officers (‘AOs’).

on -line verification on e-filing portals

Ø CBDT has sent communication/information to selected persons for submission of further information supporting to cash transactions during demonization on e-filing portal.



·        PAN holder/taxapayer: can view the information using the link  ‘Cash Transaction 2016’ under ‘compliance’ section at the portal https://incometaxindiaefiling.gov.in.

·        Persons under verification who are not registered under e-filing portal : Email and SMS sent to such persons for submitting online response. Such persons should register immediately by clicking on ‘Register Yourself link.



Ø CBDT has issued the user guide and FAQ’s.



Ø Additional information :  The AO will monitor the responses of each record and if required can ask for additional information which will be communicated to taxpayer through email and SMS.  The time limit of five days will be desirable to adhere by AO in case of additional information required. The information request will be visible to the person under verification with a hyperlink for uploading information. All the additional documents (including supporting evidence) are required to be submitted online.



Ø Conducting verification : Online verification relates to preliminary verification of information only and the same should not be construed s conducting scrutiny or in-depth authentication .



·        The online verification should be focussed and limited to the issue under verification the outcome of which is either ‘Acceptable’ or ‘Non-Acceptable’. The queries raised should be relevant and limited in number since this is a preliminary verification process only .

·        The Assessing Officer is required to verify each information record individually and take a decision about each record being ‘Acceptable’ (where the nature and source of cash deposit for that particular record is explained by the person under verification to the prima-facie satisfaction of the Assessing Officer) or ‘Non-Acceptable’ (where the Assessing Officer is not satisfied with the explanations offered by the person under verification  based on the information available) . For each ‘Non-Acceptable’ information record,  the undisclosed income will have to be ascertained and recorded along with verification remarks on the portal [the format has been reproduced in the Verification Guide] .

·        It is reiterated that no independent enquiry or third party verifications are required to be made by the Assessing Officer outside the online.Whatever information is necessary during verification, the same has to be collected through the person under verification using online platform only. Even telephonic queries are to be avoided.

·        The verification of a particular case shall be complete only when:

(a) each information record reflected in that case gets verified and has been marked either as ‘Acceptable’ or ‘Non-Acceptable’ (with mentioning of undisclosed income in the latter category); and

(b) Approval has been given by the supervisory authority as prescribed at Para 7 of this instruction



·        The cases under the ‘Non Acceptable’ category would get escalated back to the Directorate of Systems and may lead to advance processing of such cases for further handling as cases involving possible tax­ evasion.

·        In case the person under verification does not respond within the time frame prescribed, it might lead to a possible inference that the cash deposit under verification is prima-facie undisclosed and consequently the AO may treat these cases under the ‘Non Acceptable’ category with relevant .



Ø APPROVAL FROM HIGHER AUTHORITIES :

If the total value of transactions is below Rs. 10 lakh (Rs.25 Lakh in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Pune, Hyderabad and Ahmedabad), the prescribed approving authority will be Additional/Joint CIT heading the For cases where the total value of transactions in a particular case exceeds the above limits, the prescribed approving authority will be the Pr. CIT concerned.



Ø DEALING WITH NON-COMPLIANCE

In cases where online response has not been submitted even after service of letter, the ITS profile of such PAN holders may be viewed to access information reported in earlier returns and under TDS/AIR/CIB. In case the cash deposit is not in line with the earlier return or information profile of the person under verification, necessary facts may be collected inter-alia by exercising the powers under section 133(6) with the approval of prescribed authority. In appropriate cases depending upon the online response or otherwise, survey action u/s 133A can be considered. During survey, where there is suspicion of back dating or fictitious cash transactions , CCTV recording of the cash counter at relevant banks may also be checked, if necessary. Reference can also be sent to the Investigation wing in appropriate cases.



In cases of intrusive actions [133(6)/133A/ref. to lnv. Wing], the outcome needs to be reported by the AO in the online portal also .



Ø INITIATION OF PENALTY PROCEEDINGS  UNDER SECTIONS 269SS/269T OF THE ACT

In case, the transaction being loan received/repaid in cash above the permissible threshold comes to notice, the AO may consider initiation of penal proceedings under the relevant provisions separately.


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