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IT department notice to 63,000 restaurants for ‘underreporting’ income

Posted on: Mar 09, 2026 22:43 IST | Posted by: Hindustantimes
IT department notice to 63,000 restaurants for ‘underreporting’ income
NEw new delhi: The Income-Tax section has sent emails to 63,000 restaurants for under-reporting their incomes, "requesting" them to update their returns before process 31.The emails were sent to these restaurants after analysing transactional information from most 1,77,000 restaurants using artificial intelligence tools.The Department conducted an investigation into tax evasion patterns in the Food & Beverage (F&B) sector in November 2025. During the exercise, it was found that several restaurants were engaged in deleting bulk bills and other modifications to suppress actual sales, a finance ministry statement said on Monday.“Advanced analytics of transactional data from about 1.77 lakh restaurants in the F&B sector was carried out using AI-enabled analytical tools. The data was compared with the turnover declared in their Income Tax Returns. The analysis revealed large-scale under-reporting of income,” it said.In some cases, recorded sales were not fully reflected in financial accounts or tax filings, and certain transactions were excluded from reported sales, it added.“Consequently, on 8 March 2026, a nationwide survey was conducted on 62 restaurants across 46 cities in 22 States. On a preliminary basis, the exercise revealed suppression of sales amounting to around Rs. 408 crore,” it said, adding that further investigations are underway.The Department continues to emphasise voluntary compliance and a trust-based approach, it said, emphasising its nudge campaign. The campaign aims to guide and advise taxpayers on correcting their mistakes.Taxpayers are encouraged to file updated returns under Section 139(8A) of the Income Tax Act. In the first phase, emails and messages will be sent to the identified 63,000 restaurants, requesting them to update their returns before March 31, 2026, the statement said.

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