1. Issues arising in reply to Notices of Cash Deposit Transactions
CA. Darshak M. Thakkar

2. 31ST January 2017

3. Cash Transactions made during 9th November to 30th December 2016 - AAAAAXXXXA
Dear ABC, Income-tax Department (ITD) has received 2 information record(s) showing total cash deposits of Rs relating to you. ITD has enabled online verification of the cash transactions and there is no need to visit Income tax office for submission of response. The information in respect of these cases has been made available in the e-filing portal. Please submit your response by following the below steps.

4. Step 1: Login to e-filing portal at https://incometaxindiaefiling. gov
Step 2: Click on “Cash Transactions, 2016” link under “Compliance” section.
Step 3: The details of transactions related to cash deposits during 9th Nov to 30th Dec 2016 will be displayed
Step 4: Submit your online response for each transaction.
Click here to refer the “Quick Reference Guide for Online Verification of Cash Deposits”.
For detailed “User Guide on Online Verification of Cash Deposits” click here.
Kindly submit your response on or before 10-Feb-2017.
Note: Please ignore this mail, if you have already submitted the response.
Regards, e-filing Team Income Tax Department

6. Sec 133C - Power to call for information by prescribed IT authority.
Sub-section (1) provides that a prescribed IT authority may issue notice to any person, requiring him to submit information or documents for purposes of verification of information in possession of such IT authority.
Sub-section (2) provides that the prescribed income-tax authority may process any information or document that has been received in response to a notice issued under sub-section (1) and provide the outcome of such processing to the AO.

7. centralised issuance of notice processing of information or documents
Clause 54 of the Bill seeks to amend sec 133C of the IT Act relating to power to call for information by prescribed IT authority. W.E.F it is proposed to insert new sub-section (3) in the said section so as to provide that the CBDT may make a scheme for enabling
centralised issuance of notice
processing of information or documents
for making available outcome of said processing to AO

8. R 114E Furnishing of statement of financial transaction
S 285BA Obligation to furnish statement of financial transaction or reportable account
R 114E Furnishing of statement of financial transaction
12 w.e.f w.e.f Form 61A

10. Overview Operation Clean Money
E verification of deposits made between to
Usage of data analytics for comparison of demonetisation data with information in ITD databases to identify taxpayers wherein the cash transactions do not appear to be in line with the taxpayer’s profile.
ITD has enabled online verification of these transactions to reduce compliance cost for taxpayers

11. Data analytics will be used to select cases for verification, based on approved risk criteria. If the case is selected for verification, request for additional information and its response will also be communicated electronically. The information on the online portal will be dynamic getting updated on receipt of new information, response and data analytics.
The response of taxpayer will be assessed against available information. In case explanation of source of cash is found justified, the verification will be closed without any need to visit Income Tax Office. The verification will also be closed if the cash deposit is declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY).

21. B3 - Cash withdrawn out of bank account

22. B4 - Cash received from identifiable persons (with PAN)

23. B5 - Cash received from identifiable persons (without PAN)

24. B6 - Cash received from un-identifiable persons

26. If the cash deposit amount displayed under A
If the cash deposit amount displayed under A.4 is not correct, please mention the correct amount under A.5. ITD intends to refer such cases to the information source for confirmation.

27. If cash is claimed to be from more than one category (or out of cash in hand), the source of cash may be assigned under various categories in the following sequence
(Adopting other sequence may result in case being selected for verification based on risk criteria)
B-3 Cash withdrawn out of bank account
B-4 Cash received from identifiable persons (with PAN)
B-5 Cash received from identifiable persons (without PAN)
B-6 Cash received from un-identifiable persons
B-2 Cash out of receipts exempt from tax
B-1 Cash out of earlier income or savings
B-7 Cash Disclosed/To be disclosed under PMGKY

28. Books of accounts maintained
Books of accounts not maintained