TAXMAN’S DATA WAR
Last year, a businessman from Rajkot, Gujarat, declared an income of less than ₹5 lakh in his tax return. However, information collated by the Income Tax (I-T) Department showed he had deposited ₹10 crore — and withdrawn ₹7.5 crore — in cash during the year. The department sent him six notices, a dozen SMS alerts and tried every means to contact him. He remained elusive, forcing it to raid the business premises mentioned in the I-T return. It was a wrong address. I-T officials took the home address from his bank, but he was missing from there. It is now in the process of attaching his bank account and other assets.
Far away, in Alwar, Rajasthan, another businessman deposited ₹27 crore cash in his bank account in 2017/18 and ₹22 crore in 2019/20. His declared income was ₹3-5 lakh. The department is after his case too.
Tax evaders, beware! Technology, especially its tools such as data analytics and artificial intelligence, is ending the heydays of exploiting information gaps to hide income from the taxman.
On the flip side, the nationwide drive to find evaders has also given a free hand to corrupt officials to exploit the system with arbitrary notices and demands. Businesses — small and large — remain at the receiving end of taxman’s hounding, threats and — at times — even violence.
Tax authorities, though, are detecting mismatches in tax returns using tonnes of information about large transactions from banks, mutual funds, companies issuing shares, stamp and registration departments of states, etc, and sounding alerts about possible tax evasion. Different wings of the revenue department — just before he superannuated in February 2021.
