Demonetisation effect: In a massive crackdown against as many as 87,000 people who deposited huge sums of presumably unaccounted cash in banks during the demonetisation period, the income tax (IT) department has asked its officials to carefully scrutinise their financials, a Bloomberg Quint reported stated. These people, despite notices being issued, are yet to file income tax returns and provide additional information to the tax department. Notices were issued under Section 142 (1) of the Income Tax Act—the section provides for inquiries into income prior to assessment. According to the report, a government official said that 87,000 people of the three lakh made deposits of over Rs 2 lakh at the time of demonetisation. However, it is not clear how much money was deposited by these 87,000 people.

“Further, a detailed analysis of any past income tax returns of these people should also be made to ascertain the nature of their transactions during the demonetisation period (November 8 to December 31, 2016),” the tax department said.

In the further course of action, the IT department will share the updated details of the 87,000 assessees’ addresses, transaction details and bank account information with the assessing officers. After verification by the assessing officers, IT department can issue assessment orders against those found guilty.

The report also stated that assessing officers have been directed to do a detailed analysis of assesses’ past income tax records in order to get a clear understanding of the transactions made during the demonetisation period. In cases where financial beneficiaries of these transactions are identified, the officials have been asked to forward the details of the officers under whose jurisdiction these beneficiaries fall. These assessments are expected to be completed by 31 March or latest by 30 June, 2019, said the report.

The cases pertain to assessment year 2017-2018 and thus the proceedings have to be completed by December 2019. However, in order to expedite closure of these cases and speedy recovery of taxes, the government has asked IT officials to get it done maximum by June 2019.