Section 285BA of Income-tax Act, 1961 deals with Obligation to furnish statement of financial transaction or report able account and rule 114E of Income Tax Rules deals with Furnishing of statement of financial transaction (SFT). Due date to Furnish such statement for Financial Year 2016- 17 is 31st May 2017.

Now days a question is coming to the mind of many professional that in case of an entity who has not entered into any of the Specified or report able financial transactions in Financial Year 2016- 17 but who falls into the class of person (reporting person) under Section 285BA Read with Rule 114E of Income Tax Rules, are they required to file NIL statement of financial transactions (SFT) in Form No. 61A.

Some of the persons are of the opinion that Nil Statement is required to be filed while others are of the opinion that Nil Statement is not required to be filed in Form no. 61A.

Nil statement in form 61A of SFT- Optional or Compulsory?

In this regard we have studied Rule, Section, User Guide, Notifications  issued by Income Tax Department and also referred related articles, news etc on the subject to come to a conclusion. Our Study finding is as follows :-

1. Statement of Financial Transaction (SFT) Report Generation Utility User Guide- Version 2.0 (May 2017)

https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/SFT_Report_Generation_Utility_User_Guide.pdf

At Page 17 of the guide in Point No. 7.4 we found that Report Utility provides the option of preparation of NIL Statement but it nowhere talks of Compulsion to file Nil statement. Extract of the same is as follows:-

“ 7.4 Preparation of NIL Statement

Utility allows user to generate SFT (XML) with no financial transactions in it. This functionality is useful when Reporting Entity has no financial transaction to report.

1. Fill required information in Statement (Part A) and select ND (No Data) from Statement Type drop down field.

2. Save XML to desired location on machine.”

2. Precedent – Annual information return (AIR) are been replaced by Statement of Financial Transactions (SFT) with effect from financial year 2016- 17. In– Annual information return filing regime return was required to be filed only if there was a report able transaction in the relevant year and Nil return was not required to be filed.

3. Relevant Extract of Section 285BA and Rule 114E

Extract of Income Tax Rule 114E

114E. (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.

Relevant Extract of Section 285BA

285BA. (1) Any person, being—

 (a) an assessee; or

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

 (c) a local authority or other public body or association; or

 (d) the Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908 (16 of 1908); or

 (e) the registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988 (59 of 1988) ; or

 (f) the Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898) ; or

 (g) the Collector referred to in clause (g) of section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013) ; or

 (h) the recognized stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) ; or

  (i) an officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934); or

  (j) a depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996) ; or  (k) a prescribed reporting financial institution,

who is responsible for registering, or, maintaining books of account or other document containing a record of any specified financial transaction or any report able 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 report able 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.

4. As per Section 285BA out of the specified persons a person responsible for registering, or, maintaining books of account or other document containing a record of any specified financial transaction or any report able account, shall furnish a statement in respect of such specified financial transaction or such report able 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.

Key Points emerging from Section 285BA

Report in form No. 61A in respect of specified Transaction is required to be submitted only if  such books of accounts or other document contains a record of any specified financial transaction or any report able account. So in case there is  no specified financial transaction or any report able account than Report in form No. 61A is not required to be submitted.

Section does not specifically mandate filing of nil statement.

5. As per Rule 114E statement in Form No 61A shall be furnished by specified persons in respect of all the specified transactions registered or recorded by such specified persons on or after the 1st day of April, 2016.

Key Points emerging from Rule 114E

Statement in Form 61A not required to be filed by such specified persons in the absence of any specified Transactions.

Rule 114E do not specifically mandate filing of nil statement.

6. In addition to above I have also gone through following notifications/ Circulars / PPT Issued by Department related to Specified financial Transactions and not found anything which suggest mandatory filing of NIL Statement in respect of Specified Financial Transaction (SFT) in form No. 61A-

1. Notification No. 1 of 2017 Dated: 17th January, 2017
2 Notification No 13 of 2016 Dated: 30th December, 2016
3 Notification No. 95/2015 Dated the 30th December, 2015
4 PPT by  Directorate of Income Tax (Intelligence and Criminal Investigation), Mumbai
5 Notification No. 19/2016 Dated: 18th March, 2016
6 Communication by ROC to Companies to furnish Statement of Financial Transactions to Income Tax Department
7 Notification No. 2/2017 Dated: 6th January, 2017
8 Notification No. 104/2016-Income Tax Dated: 15th November, 2016
9 Email on Statement of Financial transactions (SFT) filing by IT Dept
10. Notification No. 91/2016 Dated 6th October 2016

7. We have also gone through various articles published on our website from time to time and not found anything in those articles which suggests mandatory filing of NIL Return in respect of Specified Financial Transaction (SFT) in form No. 61A-

1. Statement of Financial Transactions (SFT) and ITDREIN
2. FAQs on Statement of Financial Transactions & Reportable Accounts
3. Amendment in rules for Quoting of PAN in various transactions (Rules 114B to 114E)
4. Communication by ICAI on Mandatory filing of Statement of Financial Transactions (SFT) on or before 31st May, 2017
5. Statement of Financial transactions – Form 61A filing & Submitting “SFT Preliminary Response”
6 Comprehensive Analysis of New Requirements of furnishing PAN & AIR Information w.e.f 01-01-2016
7. TCS and furnishing of Statement of Financial Transaction [SFT]

Conclusion In our view filing of Nil Statement in form No. 61A is not mandatory under section 285BA read with rule 114E but to be on safer side Assessee may consider filing such return. Further to maintain consistency Assessee who has filed Annual Information Return for Financial Year 2015-16 may consider filing such return for financial year 2016-17 too despite no specified transaction in Financial Year 2016-17.

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46 responses to “Nil statement in form 61A of SFT- Optional or Compulsory?”

  1. Rahul says:

    If a NBFC is not issuing any share, debentures, or bonds then weather the company is reportable under point no SFT-007 and SFT-008??
    and what option to select there
    Not Applicable,
    Nil Transcation.??

  2. Krishna says:

    Thanks for this very useful and relevant thread. I would like to contribute something extra on the issue, CBDT has issued a circular after this thread was posted, it was issued on 26/05/2017 ( Link: pib.nic.in/newsite/PrintRelease.aspx?relid=162147 )

    I would like to quote from the circular:
    “The registration of reporting person (ITDREIN registration) is mandatory only when at least one of the Transaction Type is reportable. A functionality “SFT Preliminary Response” has been provided on the e-Filing portal for the reporting persons to indicate that a specified transaction type is not reportable for the year.”

    From this it is clear that the department wants us to mandatorily file the Preliminary response as Not applicable or Not transacted. The SFT response (not preliminary) has to be filed only when reportable transaction arises.

    I know this is a bit late to be able to help in this year’s compliance but I hope it clarifies any future doubts that may arise.

    • CA RATAN SHARMA says:

      No need to file Nil Form 61A. Its an useless exercise, do not serve any purpose for department . Even the higher authority understand this. If the AO levy the penalty anyway, I m sure will not stand in appeal. Nothing to worry.

  3. Anand says:

    Sir my busiess accounts comes under 44AB. I have a query that I had more than 50 LAKH cash deposit Bank OD account towards cash sales amount for the year 2016-17.(All cash bills are below 2 Lakh.only.) Do i need to file SFT? If yes than what particulars I have to file, whether transactionwise details or lumpsum amount details or party wise details I have to submit. Thanks

  4. swapnil says:

    File the Preliminary Response sheet without ITDREIN no in case of Nil report

  5. vswami says:

    OFFHAND

    The write-up says, and also, some comments are to the effect that in order to play safe, filing of a statement of ‘nil’ transaction is advisable. In offering such a suggestion, reference has been made to on the fact that the portal provides for, so as to accommodate, a “ STF preliminary response”.
    Such reference is presumably wrt the portion of the CBDT ‘s clarification, which reads:
    “The registration of reporting person (ITDREIN registration) IS MANDATORY ONLY WHEN AT LEAST ONE OF THE TRANSACTION TYPE IS REPORTABLE. A functionality “SFT Preliminary Response” has been provided on the e-Filing portal for the reporting persons TO INDICATE THAT A SPECIFIED TRANSACTION TYPE IS NOT REPORTABLE FOR THE YEAR.” (FONT supplied)
    As per own reading, the purport and import of the words highlighted above, are seen to make it clear that a “SFT preliminary response” calls for compliance not by all, but only if a reporting person has at least one of the reportable types of transaction (s).
    Be that as it may, now that an attempt has been made to create some confusion, unwarranted though, in one’s conviction, the CBDT, in its own interests, if so considered and found fit, with a view to nipping in the bud and setting at rest any such controversy, make it explicit and abundantly clear.

  6. vivek says:

    in case of audit under section 44ad but no other transaction as specified is it necessary to file 61A?

  7. Vinod Kumar says:

    Well explaining article.

    Further to add this, Now separate Form 61A is required to file for each specified transactions individually.

    We at GAIL INDIA LTD filed 5 Form 61A for Nil transactions of Five Nature SFT applicable to Corporates- viz. Bonds & adventures, issuing shares, buyback of shares, Receipts and Payments SGT.

    Regards,

    Vinod Kumar
    DY.MANAGER (TAXATION)
    GAIL

  8. S.Jeyaraman says:

    If Nil report not filed, the department presumed that the Form 61A is not filed and issue notice. Hence Nil report is to be filed

  9. Ashok Garg says:

    The language of Rule 114E suggests that all the persons listed in col.3 of the Table are required to file SFT in respect of transactions in col.2.Thus the requirement to file SFT is there on the basis of status of the person (col.3) and is not dependent on outcome of col.2.
    On the other hand , objections are right that what the deptt. will do with useless data.
    Till the provision is suitably amended , we have to put up with shabbily drafted law.
    The safest course is to file Preliminary response showing NIL txn. That will be sufficient and reasonable cause for avoiding penalty if any.

  10. Nishant Singh says:

    I am uploading the Form 61A Zip file but while uploding it shows Invaild ZIP file. Please upload the valid Zip file. Please tell me the solution of this

    • CA RATAN SHARMA says:

      Conver your xml file with zip file with the help if winzip or online converter and then upload

  11. ASRAMAN says:

    in filling of form no 61A how to respond thefollowing
    Statement NO, ORGINAL statement ID, NO of
    reports

  12. Rakesh Agarwal says:

    Very timely information posted on your website. Your analysis is helpful in removing cobwebs on the twisted language used in the Act and Rules.

  13. S.Ramamurthi says:

    Sir
    I have generated SFT xml while uploading in IT efiling portal , when uploaded the comment received is DSC is not registerd or expiry DSc pls.help me to upload the file

    • Saurabh Agarwal says:

      Register your authorised person DSC with his individual PAN then upload

      • CA KIRAN KANCHI says:

        I could not find any option to register DSC of authorised person. From where to register it.

        • kushal jain says:

          1st check who is the auth. resp. of that PAN you have logged in. Then log out and sign in of that auth resp PAN and register his DSC.

  14. Ashu says:

    Dear Sir

    Please tell if a person liable for audit under sec 44ab has to submit statement of financial transaction under followin point:
    If there is a receipt of more than 2 lac in fy 2016-17 ( whole financial year) or single receipt of 2 lack or more in a single day?

    • CA NAVEEN KUMAR says:

      Sec:285BA is applicable only if a person covered under 44ab receives 2 lakhs in cash with respect of “single invoice in lumpsum or aggregate”

  15. Satish Gawas says:

    I think if we are not dealing in cash at all to run our business then
    we don’t need to submit form 61 A

    In “SFT preliminary response” page on IT website they have mentioned following details.
    1) Transaction Type (Various transaction types are mentioned)
    2) Reportable transactions (Values = Yes, No, Not Applicable)

    In the “Note” section below they have mentioned
    1) to select “Yes” if there are reportable transactions
    2) to select “No” if transaction type is applicable but no reportable transactions
    3) to select “Not Applicable” if Transaction type is not applicable

    The main issue here is the “Transaction type” SFT-013: Cash payment for goods and services

    Now if in your business activity you are not at all dealing with cash then the Transaction Type is not applicable to you. If You are dealing with cash then the transaction type will be applicable but you may not have reportable transactions, then select “No” and submit the form 61A with “No-Data”.

    But I also feel that Transaction Type “SFT-013” includes Rs 2 lk limit and the audit case, they have
    not mentioned it there because they can’t put such a long line there.
    So revised Transaction type could be “More then 2 lakh Cash payment for goods and services by those whom 44ab tax audit is applicable”, then you can safely select “Not applicable” even if you deal with cash to run your business.

  16. CA Shyam Rathi says:

    Good analysis CA Sandeep.
    I think preliminary response at assessee’s login is sufficient for no reportable specified transactions.

  17. CA NILESH MEHTA says:

    GREAT EFFORTS AND GOOD ANALAYSIS

  18. ROHIT JAIN says:

    In case an individual have turnover less than 1 crore but he get his accounts audited due to retain profit < 8% or 6% and than Is he in obligation to report the financial transaction.

  19. babulal says:

    Please confirm what is the statement number and statement ID under preparation of Form61A for generating the XML File for NIL 61A filing

  20. m s chandramohan says:

    A very good effort by Shri Sandeep
    An analytical view of sec 285BA
    Moreover the last date specified in this regard is too early since compliance need to be done C As
    only. Thank you for your views

  21. Bhuvanesh Kankani says:

    Sir, the comments given by you are the same which the Professionals as on date have.
    Further its has been ended by stating that to be on safer side it shud be filed. Sir, this is what exactly every professional is feeling as on date.

    However, it was a nice article sir.

  22. Subramani says:

    If nil statement is not required, why then preliminary response is sought from every tax payer. It would be better if FAQ by CBDT and being the first year for general tax payers extension of time may be given

  23. Ritesh says:

    I think ‘suggesting’ here means that efiling website is not accepting response as ‘NO’ unless IRDREIN is generated.

  24. Ganesh P says:

    form 61A requires the original statement ID. When we have no statement to file, what is the ID? cannot validate the nil return

  25. T K Shanbhag says:

    Since Report Utility provides the option of preparation of NIL Statement, with a view to avoid the department coming out with notice for non- filing of 61A at a later date after a long period, proposing the penalty (just as it happened in TDS returns filing), it may be advisable to file the NIL return on or before due date.
    It is better on the part of the department to come out with clarification in this regard.

  26. Pankaj Agrawal says:

    In my opinion it is reporting of Specified Transactions. When there is no specified transaction liable to be reported, NO need to furnish NIL statement.

  27. CA Chandravijay Shah says:

    Greta Efforts.

    Still, it is a grey area.

  28. CA Himanshu Gandhi says:

    In my opinion, Filing of SFT (form-61A) is mandatory, even if there is NIL / NO re portable transactions happened during F.Y.2016-17. Reason is that I.Tax authority will not know unless your filing of SFT and other reason is that Principal Officer filing SFT with DSC , so in case if any goes contrary to submission , IT dept will take action against Principal Office for wrong / inaccurate submission.

  29. Kavinandan.S says:

    Respected Experts!

    in respect of Sl. # 11 of Rule 114E ( receipt of cash on sale of goods and service), which of the following need to be reported:

    1) 2 invoice of Rs. 1.50.000 each have been collected in cash.

    2) 1 invoice of Rs. 3,00,000 is realised in cash at 3 different dates.

    3) 1 invoice of Rs. 3,00,000 is realised half in cash and half through cheque.

    The notification came in December said the transaction need not be aggregated. But my doubt still remains , is it the Sale invoice or the total Receipt per day from a party which is intended as “the transaction”.

    Any Reference or citations would be really helpful.

  30. ANIL KUMAR K TILWANI says:

    WHEN NOT PROVIDED FOR EXPRESSLY IN THE SECTION, WHY TO FILE NIL STATEMENT ?

  31. al.subramanian says:

    As per the department letter I think we should send response as ‘NOt APPLICABLE / NO ‘ through ‘ STF preliminary response’ under compliance section post log in to efiling portal.

  32. Mohan says:

    Sir,
    What about Preliminary Response under “Compliance” at E-filing ?
    44AB Assessee not having any Specified Financial Transactions (SFT) can submit Preliminary Response with type “Not Applicable”.

    My Query is is “Preliminary Response” is sufficient for NIL SFT ??

    • S B Bhattad says:

      To my mind, it is sufficient ,as there are no such re-portable transactions .
      Dept, certainly will not , or should not expect any data which is of no use to it.

  33. A K Swaminathan says:

    Thanks for the analysis.

  34. Ankita Agrawal says:

    In case of no transactions Income Tax is suggesting to file a preliminary response of SFT at income tax website.

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