Mangaluru (The Hindu): The suspicion that cooperative banks are safe havens for income-tax evaders appears to be true with the Directorate of Income Tax (intelligence and criminal investigation) finding thousands of entries (deposits) worth over Rs. 50 lakh in 25 banks that had not been reported to it as per the Income Tax Act.

A cooperative bank in Dakshina Kannada alone had 2,500 entries each above Rs. 50 lakh and worth over Rs. 4,500 crore while the remaining banks in the State had over 59,000 such entries worth over Rs. 8,000 crore.

When notices were issued to those 2,500 persons of DK Bank, about 300 responded with about 100 going for Income Declaration Scheme (for regularising black money) and the rest going for revised IT returns, said R. Ravichandran, Director of Income Tax (I & CI), Karnataka-Goa.

While banks are mandated to furnish annual information report, the directorate grew suspicious about irregular reports or non-submission of reports by cooperative banks. It conducted inspections across the State since a year and found grave irregularities, he told reporters here on Thursday. One branch manager himself had a deposit of Rs. 2.5 crore in his bank, he noted.

Stating that focus on cooperative banks by the department is the first of its kind in the country, Mr. Ravichandran noted that reported evasions could net considerable amount of tax.

Another set of persons not reporting high-value transactions are the sub-registrars — about 282 in the State — about 60 percent of whom have not been reporting land transactions worth over Rs. 50 lakh.

The directorate has issued notices to defaulting sub-registrars, who have to pay Rs. 100 per day fine from the date of registration and Rs. 500 per day after 30 days of getting the notice; which account to about Rs. 1.5 lakh to Rs. 2 lakh.

Creating awareness

Mr. Ravichandran said the department’s intention is not to penalise officials of the bank or registration department; but to educate them. By hiding the information or not sending statements, they would be aiding tax evasion which is against the national interest. The department anyway has the power to inspect the offices at any time and get documents concerned, he said.

Transport department is mandated to obtain PAN of every new vehicle owner, except of that two-wheeler. The department would get the details if required, he said.

Workshop conducted

The Directorate of Income Tax (Intelligence and Criminal Investigation), Karnataka-Goa, conducted a half-day workshop for sub registrars, representatives of urban cooperative banks and regional transport officers from Dakshina Kannada, Uttara Kannada, Udupi and Shivamogga districts here on Thursday.

Director of Income Tax R. Ravichandran inaugurated the workshop and exhorted the participants to file annual information reports to the Directorate as mandated by the Income Tax Act. The Directorate keeps watch on high value transactions, including property, cash deposits, credit cards, purchase of motor vehicles etc.

Income Tax Officers (I & CI), Mangaluru and Bengaluru Iola Tauro and H.K. Rajkumar made presentations on the occasion.