Quick Summary
Income Tax Department commenced a Search Seizure operation in the case of some Cooperative Banks, in the State of Karnataka, on 31.03.2023. These cooperative Banks have been found to be engaged in routing of funds of various business entities of their customers, in a manner, so as to abet them to evade their tax liabilities. A total of 16 premises were covered in the search action. A large number of incriminating evidences in the form of hard copy documents and soft copy data have been found
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FAQ :
The Income Tax Department commenced its Search & Seizure operation on 31.03.2023.
The banks were searched on suspicion of facilitating tax evasion for their customers by routing funds and allowing dubious transactions to help businesses evade tax liabilities.
The banks allegedly discounted bearer cheques from various business entities, often in the name of fictitious entities, without following KYC norms. Funds were then credited to cooperative societies, which sometimes withdrew cash and returned it to the business entities to mask the source and book bogus expenses.
The bogus expenditure booked by the beneficiary business entities through this method is estimated to be around Rs 1,000 crore.
Yes, the search also revealed that the banks allowed FDRs using cash deposits without adequate due diligence, leading to unaccounted cash loans of over Rs 15 crore. Bank management is also suspected of generating and layering unaccounted money for personal use.
During the search, unaccounted cash of over Rs 3.3 crore and unaccounted gold jewellery worth over Rs 2 crore were seized.
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