Post demonetisation, thousands of jewellers, petrol bunk owners, real estate developers, transporters, and contractors in Karnataka have been found to have deposited more than ₹2.5 lakh between November 8 and December 30.
So far, the Income Tax Department has detected ₹2,710.22 crore deposits in 1,055 cases in the State where account holders, who deposited the money without providing PAN details, have failed to provide satisfactory answers on their income.
The department, which went through the cash deposit reports from banks, found that several thousands of accounts in the State received deposits more than ₹2.5 lakh. Incidentally, 18 lakh such cases across the country have been identified. The banks have now been asked to provide cash deposit report of these accounts from April 1, 2016, to November 7, 2016, to assess if there was abnormal increase in transactions, an official said.
“Deposits above ₹2.5 lakh between November 8 and December 30 are being aggregated by the department in New Delhi, and notices have been issued through emails and SMSs. Where response has not been satisfactory or no response was received, action is being initiated. In Karnataka, ₹2,710.22 crore deposits have not been explained satisfactorily,” an official explained.
In nearly 95% of the 1,055 cases, the department has been able to identify PAN of depositors, and notices have been issued to them seeking explanation, the official said.
Undisclosed transactions
Meanwhile, the quantum of non-PAN deposits made in cooperative banks across the State unearthed by the department has increased to around ₹9,000 crore.
Though providing PAN details for deposits above ₹49,000 is mandatory since 2006, cooperative banks in Karnataka continue to take deposits without PAN details, and these deposits are not disclosed to the Income Tax Department. During the last few months, the department officials, have conducted 22 searches, and penalties have been imposed in 37 cases. “Prosecution was granted in three cases,” another official said.
The searches by the department has also revealed irregularities other than non-PAN deposits.
“Cooperative banks were found to have favoured people close to the management in disbursal of loans and taking money for providing jobs,” the official said.
Data mining techniques to identify tax evaders
Instances of chartered accountants and advocates advising people with undisclosed income not to declare it before the I-T Department has come to our notice, an official said. “Some of these professionals have been found to be advising tax evaders that it is unlikely that high-value transactions could be detected and if detected, it could be challenged through appeals. However, over the next two years, we will use data mining techniques to identify evaders,” said B.R. Balakrishnan, Director-General Investigations, Income Tax, Karnataka and Goa.
Mr. Balakrishnan appealed to tax evaders to opt for Pradhan Mantri Garib Kalyan Yojana, the last chance to declare undisclosed income. “The deadline of the scheme is March 31. Those found with undisclosed income after April 1 will have to pay penalty up to 137.25%,” said Nutan Wodeyar, Principle Chief Commissioner of Income Tax, Karnataka and Goa.
Bengaluru most tax compliant?
With 22.48% growth in tax collection this financial year, Bengaluru could well claim to be the most tax compliant city in the country. The I-T officials acknowledged that the city could claim the position considering the tax collection growth rate. However, in absolute sense of total collection, Bengaluru is in third position after Mumbai and New Delhi.
The Income Tax Department (Karnataka & Goa circle) has been able to achieve the target of ₹85, 478 crore tax collection. As on Monday, ₹86,229.50 crore had been collected. During 2015-16, the department collected ₹70,400.20 crore tax.
On the diary controversy
Income Tax Department officials on Monday claimed that the diary allegedly recovered from Congress MLC Govindaraj that had entries of kickbacks, had not been leaked by them.
Refusing to comment on whether the alleged diary existed or not, officials said they had replied “satisfactorily” to Mr. Govindaraj, who had sought an explanation, and also to the Police Commissioner with respect to a case filed by Mr. Govindaraj. Mr. Govindraju had claimed that the diary did not belong to him.
Meanwhile, Police Commissioner Praveen Sood refused to disclose contents of the letter received from the Director-General of I-T Investigation, while Mr. Govindaraj could not be reached for his comment.
