The Income Tax Department has reportedly issued 10,000 reopening notices to companies and individuals in major cities, seeking explanations for discrepancies in their reported incomes. This action comes alongside the Central Board of Direct Taxes' (CBDT) recent directive to monitor rampant cash transactions in sectors like hotels, luxury brand sales, hospitals, and IVF clinics, urging the department to approach these cases in a "non-intrusive" manner. The notices, related to the 2018-19 assessment year, must be issued by August 31, after which such cases cannot be reopened.
The suspected undisclosed income in these cases, according to a Business Standard report, could amount to as much as Rs 15,000 crore, involving entities across Delhi, Mumbai, Bengaluru, Pune, Chennai, and Hyderabad. Many of these cases involve suspected bogus charitable donations claimed under Section 80G of the Income Tax Act and high-value overseas transactions, such as property acquisitions. BT couldn't independently verify the report.
The reopening notices are part of a broader effort by the tax department to extend its reach into past assessments, especially given the recent Budget proposals. These proposals allow income tax assessments to be reopened beyond the standard three-year period if the escaped income is Rs 50 lakh or more, extending the timeframe to five years from the end of the assessment year. In search cases, the time limit has been reduced from ten years to six years.
Before a reopening.