The income tax department will start dispatching notices under the I-T Act to nearly 6,00,000 depositors who have deposited over Rs 50 lakh old notes into bank accounts but have not responded to the IT department notice nor have filed the Income Tax Returns and the Department is waiting in the wings for the last date for the submission of returns and thereafter the enquiry begins. A second round of notices will be dispatched and if there is no proper or legitimate or concrete reply or response, the Department will initiate penal action.

It is further learnt that over 18 lakh cases were reported and over 12 lakh replies or responses had been received.  Even the 12 lakh replies and details are under thorough scrutiny and had not been accepted yet.

As per the law of the land, all the depositors or the assesses will be given ample opportunity to defend their action. If the returns or replies or the details or documents submitted are false/fake/bogus/manipulated/misleading, the department will initiate both penal proceedings and recovery proceedings as mandated by the prevailing laws.

With over 99% of the demonetized Rs 500 and Rs 1,000 notes back in the banking system, the government is being questioned whether the entire exercise flushed out any black many at all. Critics are questioning Prime Minister Narendra Modi’s move arguing that it only resulted in further slowing down the economy and massive job losses in the unorganized sectors. The government has countered the criticism saying that the move will yield results over time.

The focus is now on the revenue department to detect and draw out black money. It proposes to scan the returns filed during the current fiscal/financial year to match sales trends of companies and their taxable income.

There is greater reliance on the statement of financial transactions which deals with property and share transactions apart from cash deposits.

It is a long journey of litigation, in case the depositors wish to contest the orders in the court.