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Operation Clean Money: ‘Error’ in I-T queries as November 8 deposit data gets mixed up

The online responses received from some of these individuals have revealed this discrepancy, which is expected to be removed in the second phase of the data mining operation.

Written by Aanchal Magazine | New Delhi |
February 10, 2017 1:11:06 am

With responses flowing in from taxpayers through the e-filing window under the recently launched Operation Clean Money, an inadvertent error has cropped up in the 18 lakh communications sent by the income tax department for cash deposits made after the November 8 demonetisation announcement. Though the tax department had asked banks and financial institutions for information regarding cash deposits made during November 9-December 30, some of them have given data for cash deposits made on November 8 also, thereby resulting in communications being sent incorrectly to some of the 18 lakh individuals.

The online responses received from some of these individuals have revealed this discrepancy, which is expected to be removed in the second phase of the data mining operation.

On November 8 night last year, Prime Minister Narendra Modi had announced scrapping of Rs 500 and Rs 1,000 currency notes, following which a 50-day window was provided to people to deposit the old currency notes. Tax department had asked banks and financial institutions to provide data for cash deposits made from the next day, November 9, till December 30, the last day of the deposit window.

“The whole exercise is being carried out in phases. Some of the responses showed that in this phase, some communications have been sent based on data on cash deposits made on November 8. The demonetisation announcement happened in the evening and some of these individuals had made legal deposits on that day (November 8). Some banks have incorrectly sent data for November 8, even though the tax department had asked for data from November 9 onwards. We have taken note of the responses and will also correct the discrepancy in the upcoming phases,” an official aware about the development said.

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The second phase of the Operation Clean Money is expected to begin after the compilation of the responses received under the 10-day window gets completed, the official added. Since the first phase included only the analysis of data of cash deposits after demonetisation, the subsequent phases will widen the scope to other financial transactions such as sale of gold by jewellers, which will be matched with their respective tax returns.

Last week, revenue secretary Hasmukh Adhia had told The Indian Express in an interview that the data mining exercise under Operation Clean Money will be undertaken in several phases over the next two years. “Whatever exercise we do and this is only the first phase, there will be phase two, phase three, phase four. It will go on for two years,” he had said.

Under the Operation Clean Money, which began from February 1, the income tax department after risk analysis and matching of cash deposits data with profiles of taxpayers had detected over 1 crore accounts wherein the cash deposits exceeded Rs 2 lakh after demonetisation. Out of these 1 crore accounts, the tax department sent communications initially to 18 lakh taxpayers whose cash deposits after demonetisation did not match their taxpayer profiles.

The taxpayers have to file their responses after logging in their online income tax return filing account at and answer from a list of options on the source of income under the link ‘Cash transactions 2016’ within the 10-day window provided by the tax department.

CBDT chairman Sushil Chandra had last week said that if the answers to the 18 lakh communications are found to be satisfactory, then the tax department will not pursue it further and will close the verification process. However, if the taxpayer does not explain the source of income within the stipulated time, the tax department will issue a notice to the taxpayer.

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