Note on Reporting of specified financial transaction as prescribed U/s 285BA read with Rule 114E of the IT Act.
Rule 114E prescribed the following transactions which is applicable to company- the relevant extract of sr. no. is reproduced for ease of understanding.
| Sr no. | Nature and value of transaction | Class of person (Reporting person) |
| (1) | (2) | (3) |
| 1 | (a) Payment made in cash for purchase of bank drafts or pay orders or banker’s cheque of an amount aggregating to ten lakh rupees or more in a financial year.
(b) Payments made in cash aggregating to ten lakh rupees or more during the financial year for purchase of pre-paid instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007 (51 of 2007). (c) Cash deposits or cash withdrawals (including through bearer’s cheque) aggregating to fifty lakh rupees or more in a financial year, in or from one or more current account of a person. |
A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act). |
| 2 | Cash deposits aggregating to ten lakh rupees or more in a financial year, in one or more accounts (other than a current account and time deposit) of a person. |
(i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);
(ii) Post Master General10 as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898). |
| 3 | One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person. | (i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);
(ii) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898); (iii) Nidhi referred to in section 406 of the Companies Act, 2013 (18 of 2013); (iv) Non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (6 of 1934), to hold or accept deposit from public. |
| 4 | Payments made by any person of an amount aggregating to—
(i) one lakh rupees or more in cash; or (ii) ten lakh rupees or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year. |
A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or any other company or institution issuing credit card. |
| 5 | Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring bonds or debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company). | A company or institution issuing bonds or debentures. |
| 6 | Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company. | A company issuing shares. |
| 7 | Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ten lakh rupees or more in a financial year. | A company listed on a recognised stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 (18 of 2013). |
| 8 | Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund). | A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf. |
| 9 | Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travellers cheque or draft or any other instrument of an amount aggregating to ten lakh rupees or more during a financial year. | Authorised person as referred to in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). |
| 10 | Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more. | Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act. |
| 11 | Receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.) | Any person who is liable for audit under section 44AB of the Act. |
Sr. 11 talk about sale of goods/ services for cash exceeding two lakh rupees . Now the question arises whether two lakh limit to be considered transaction wise or in aggregate person wise.
section 269ST prohibit acceptance of two lakh rupees or more in cash –
a. In aggregate from a person in a day; or
b. In respect of a single transaction; or
c. In respect of transaction relating to one event or occasion from a person.
Sub clause (a) and (b) is easy to interpret however, clause (c) has got wider ramification. One may interpret that sale of goods in cash in excess of Rupees two lakh though may have been sold to different parties at different date may also be covered even though each party sale is not exceeding rupees two lakh.
For example, following transaction taken place in cash in the FY 2018-19
| Date | Customer name | Nature of transaction | Rupees |
| 15th April, 2018 | M/s XYZ Ltd | Sale of goods | 50,000/- |
| 30th June , 2018 | M/s PQR Ltd | Sale of goods | 90,000/- |
| 30th March, 2019 | M/s XYZ Ltd | Sale of goods | 1,60,000/- |
Therefore, for the purpose of reporting in sr no. 11, we have to aggregate person wise or event / occasion wise and accordingly, cash sale to M/s XYZ Ltd is of Rs. 2,10,000/- & M/s PQR Ltd is of Rs. 90,000/- will qualify for the reporting purpose because sale of goods is treated at occasion and in this case it exceeds rupees two lakh rupees.
Therefore, transaction with M/s XYZ Ltd and M/s PQR Ltd will qualify and is required to be reported in sr. no.11.
Even cash deposited by the customer directly in company account will be treated as cash sale.
Consequence :
Section 271DA – Penalty for failure to comply with provisions of section 269ST, imposes hundred percent penalty of cash receipt on company receiving cash in excess of rupees two lakh rupees.
Due date of filing Form no. 61A is 31st May following financial year ending 31st March.
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