Income Tax Dept acts against 62 restaurants in 46 cities, suppression of sales under scanner:

 

1.  In an extensive exercise against underreporting of income in the food and beverages sector, the Income Tax Department carried out surveys against 62 restaurants across 22 states covering 46 cities including Shimla, Murthal, Chandigarh, Ludhiana, Godhra, Ahmedabad, Kollam, Kochi, Madurai, Guwahati, Delhi, Gurugram, Mumbai, Chennai, Kolkata.

2.  An initial analysis suggests that the underreporting of sales could be of around Rs 408 crore in this round of surveys that were carried out on Sunday.

3.  The wide-scale action against restaurants comes weeks after the Income Tax Department had undertaken investigations into the tax evasion pattern for a biryani chain in Hyderabad, alleged to have suppressed Rs 70,000 crore of sales through billing software manipulation.

4.  The Department is making use of AI analytics to uncover the tax evasion route adopted by these restaurants from the transactional data of about 1.77 lakh restaurants collected during the investigation.

5.  The Department has now commenced the SAKSHAM NUDGE campaign advising taxpayers to correct their mistakes. In the first phase, emails and messages will be sent to the identified restaurants.

6.  The Department has asked these restaurants to file updated returns under section 139(8A) of the Income Tax Act before March 31.

Note:

A survey, conducted under Section 133A of the I-T Act, is usually a precursor to a search and seizure operation, and takes place only at business premises. I-T officials look into the books of accounts, bank accounts, cash, stock and non-valuable documents during a survey.