I-T department will probe cases of spike in income under revised returns
Those who showed a sudden spike in income when filing revised tax returns after demonetization should now prepare themselves to face scrutiny.
These cases are in addition to the 1 lakh high-risk cases already
identified by the income tax department for scrutiny based on
information gathered from banks. “Questions need to be asked where there
is a sudden spike in income and a revised return is filed,” said a senior income tax official. “We will take them up for scrutiny.”
The department is proposing to be selective and focused instead of
going in for mass scrutiny to make the process more effective. It’s also
trying to make the exercise non-intrusive, so the limited scrutiny will
be completely online, carried out via emails.
Rs 5,000 crore was deposited under the Pradhan Mantri Garib Kalyan
Yojana that was launched in the wake of the note swap to give people one
last chance to come clean.
With that having come in well
below expectations, the income tax department is getting ready to take a
look at suspect cases.
A higher revised income could
indicate hidden non-tax paid incomes or unaccounted cash from previous
years being disguised as a rise in sales, according to officials.
There have been instances of individuals and businesses showing higher
income or sales and then a revision in returns filed after demonetization, apart from reports of high-value purchases.
The tax laws allow for filing revised returns if some income is missed out unintentionally.
Prime Minister Narendra Modi cancelled the legal tender status of Rs
500 and Rs 1,000 notes on November 8 as part of the government’s
campaign against black money. The invalid notes had to be deposited with
the banks by December 31.
OPERATION CLEAN MONEY 2.0
The Central Board of Direct Taxes (CBDT) has already rolled out the
second phase of Operation Clean Money. It has identified about 1 lakh high risk persons using advanced data analytic.
categories identified include businesses claiming cash sales as the
source of money deposited post demonetization, cash which is found to be
excessive compared to past profiles or industry norms. Large cash
deposits made by government or public sector employees and persons who
have undertaken high-value purchases have also been identified.
Persons who have used shell entities for layering of funds and where
the department did not receive any response after it sent SMSes and
mails will also be subject to deeper investigation, which could include
search or surveys, officials said.