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In a renewed effort to tackle tax evasion, the Income Tax Department has initiated a fresh wave of reassessment proceedings targeting businesses suspected of inflating purchase entries to reduce their taxable profits. According to sources, several previously concluded assessment cases are being re-e
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FAQ :
The department is reopening cases to tackle tax evasion by businesses suspected of inflating purchase entries using fake invoices to reduce their taxable profits.
The crackdown is focusing on sectors historically vulnerable to invoice manipulation, including trading, construction, and electronics.
The department is leveraging the integration of GST and income tax data through advanced analytics, and cross-verification between GST filings and income tax returns to identify anomalies.
In standard cases, reassessments can be initiated up to three years from the end of the relevant assessment year. For cases involving undisclosed income exceeding ₹50 lakh, the window extends up to five years.
Businesses may face additional tax demands, penalties, interest, and in some cases, prosecution, especially if the evasion is deliberate and large-scale.
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