Operation Clean Money: Over 60,000 identified for tax probe

Operation Clean Money: Over 60,000 identified for tax probe

NEW DELHI: Under the tax department's Operation Clean Money (OCM), more than 60,000 people, including 1,300 high risk, have been identified for investigation into claims of excessive cash sales during the demonetization period. More than 6,000 transactions of high value property purchase and 6,600 cases of outward remittances (बाह्य प्रेषण) shall be subjected to detailed investigations, a government statement said. All the cases where no response is received shall also be subjected to detailed enquiries. 

It said that extensive enforcement (प्रवर्तन) action has been taken by the government including search and seizure and surveys largely based on the information received during the demonetisation period.

More than 2,362 search, seizure(अभिग्रहण) and survey actions have been conducted by the Income Tax Department during November 9, 2016 to February 28, 2017, leading to seizure of valuables worth more than Rs. 818 crore, which includes cash of Rs 622 crore, and detection of un-disclosed income of more than Rs 9,334 crore.

Over 400 cases have been referred by the tax department to the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI). Surveys have been conducted in more than 3,400 cases by Assessment Units.

"The impact of government action is already visible in the increase of 21.7% in the returns of income received in FY 2016-17, 16% growth in gross collection (the highest in the last five years), 14% growth in net collection (the highest in last three years) and above 18%, 25% and 22% growth in personal Income Tax, regular assessment tax and self-assessment (आत्म मूल्यांकन) tax respectively," the statement added. 

The Income Tax Department launched Operation Clean Money (OCM) on January 31, 2017 to leverage technology for e-verification of cash deposits made during the demonetization period.

The operation being conducted by the tax department using advanced data analytics and causing minimum inconvenience to the taxpayers.

The first phase of Operation Clean Money involved e-verification of cash deposits made in the banks. The entire phase was conducted online, and 17.92 lakh people, who entered into cash transactions that did not appear to be in line with their tax profile, were identified and requested for online responses on such transactions.

Out of this, 9.46 lakh people responded on predefined parameters of sources of the cash deposits. Online queries were raised in 35,000 cases and online verification was completed in more than 7,800 cases.

The statement said that it has been decided to close the verification in cases where explanation of source of cash was found to be justified. In cases where the cash deposit has been declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY), the verifications would also be closed.

The operation has now moved into the second phase with identification of high risk persons for detailed investigations by the tax authorities.

The identification has been done through use of advanced data analytics, including integration of data sources, relationship clustering (गुच्छन) and fund tracking. The high risk categories identified include businesses claiming cash sales as the source of cash deposits which is found to be excessive compared to their past profile or industry norms; large cash deposits made by government or Public Sector Undertaking (PSU) employees; persons who have undertaken high value purchases; persons who have used shell entities for layering of funds, and where no responses were received.

"One of the stated objectives of demonetisation was 'elimination(निकाल देना) of black money that casts a long shadow of parallel economy on our real economy'. The OCM and the subsequent enforcement actions being undertaken by the ITD shall continue to achieve the goal set out by the government," the statement said.

"The opportunities created by demonetization is being used by the income tax department for widening and deepening of the tax base and create deterrence, not seen before, and to curb generation of black money in the Indian economy. The complete exercise of examining all the doubtful and non-tax compliant accounts may take more than one year but with the help of technology and continuous enforcement action all the liable accounts will be brought to tax," it added.