Since the government’s announcement on abolishing old notes of Rs 500 and Rs 1,000, the Income Tax Department carried-out “swift investigations” in more than 400 cases, detecting nearly Rs 2,000 crore of undisclosed income and seizing over Rs 130 crore in cash and jewellery, the finance ministry said in a statement on Tuesday. The investigative agencies have stepped up action after many cases came to light of people illegally converting old notes into new currency or gold for a commission.
“Detecting serious irregularities beyond the Income-tax Act, the Central Board of Direct Taxes (CBDT) decided to refer such cases to the Enforcement Directorate (ED) and the CBI, enabling them to examine the criminal conduct for immediate necessary action. More than 30 such references have already been made to the ED, and are being sent to the CBI,” the ministry said.
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Giving details of various cases which have been referred to ED and the CBI, the statement said the Mumbai unit has referred a case where Rs 80 lakh in new high denomination currency notes were seized. The Bengaluru Investigation Unit of the Income Tax Department has sent maximum references (18) to ED. These are cases where undisclosed cash in new high denomination notes was seized by the Department.
“The concerted and coordinated enforcement action of the Income Tax Department, ED & CBI in detecting the malpractices and taking swift action is going to continue in the coming days,” the finance ministry said.
The Ludhiana Unit has referred two cases, where seizures of $14,000 and Rs 72 lakh in cash were made. Hyderabad forwarded a case involving seizure of Rs 95 lakh cash from five persons. Pune’s reference stems from a seizure of Rs 20 lakh cash, including Rs 10 lakh in new currency notes from an unallotted locker of urban cooperative bank, the key of which was in the possession of the CEO of the bank. Two cases referred by the Bhopal unit are of jewellers against whom evidence of large scale predating of bills and flouting of PAN reporting norms were detected during searches.
The cases referred from the Delhi unit include the Axis Bank, Kashmiri Gate branch case in which complicity of officers of the bank in malpractices was detected. The ED has already arrested two bank officials in this regard.
Last week, the CBDT said that it has found “various inconsistencies” in cash deposits in Jan Dhan accounts and detected about Rs 1.64 crore deposited by persons who have never filed returns as their income shown is below the taxable limit.
The investigations were carried out following sudden surge in deposits in such accounts. Deposits in about 25.5 crore Jan Dhan accounts increased to Rs 74,321 crore till November 30, as against Rs 45,636.61 crore on November 9.
Prime Minister Narendra Modi on November 8 announced the decision to withdraw old notes of Rs 500 and Rs 1,000 from circulation and asked holders of such currencies to deposit it in bank accounts by December 30.
The deposits of old notes have swelled with the banks since the announcement of these being dropped as legal tender. As per latest data released by the RBI, between November 10 and November 27, banks reported exchange and deposits of old notes worth Rs 8.45 lakh crore (exchange of Rs 33,948 crore and deposits of Rs 8.11 lakh crore).
During this period, an amount of Rs 2.16 lakh crore had been withdrawn by people from their accounts. To prevent people from using others’ bank accounts to convert their black money, the government passed amendments to the Income Tax Act enabling the taxmen to impose a higher penalty and tax on assessees of unexplained deposits, totalling up to 85 per cent.