In the wake of the surprise crackdown on the circulation of black money that has been implemented by the Centre, the Income Tax department on 11 November conducted multiple raids in Delhi, Mumbai and other cities after being tipped off about alleged profiteering and subsequent tax evasion by converting withdrawn currency notes in an illegal manner.
According to officials, the operations were being carried out at least at four locations in the National Capital, including popular market places such as Karol Bagh, Dariba Kalan and Chandni Chowk, three locations in Mumbai, and few others in Chandigarh and Ludhiana.
In Jaipur, income tax officials raided a major electronics market, prompting all major market places in the city to shut shop.
Similar survey operations are also understood to have been launched in two south Indian cities.
Interestingly, the operations were launched from the evening as the taxman wanted some hard cash to get accumulated at the payment counters to make the action effective.
Sources said the department had received "actionable inputs" that some traders, jewellers, currency exchanges and hawala dealers were allegedly exploiting the recent demonetisation of Rs 500 and Rs 1,000 notes and were exchanging currencies at "discounted" prices, thereby profiteering illegally.
They said the operations were planned after CBDT Chairman Sushil Chandra on Wednesday asked all the investigation units in the country to keep a check on suspicious movement of huge cash and other illegal transactions leading to tax evasion.
Officials added that almost over 100 tax sleuths along with police officials have been roped in for the survey operations.
At few places, they said, some preliminary documents have been seized.
Finance Minister Arun Jaitley on Thursday assured people that taxmen will not hound those making small deposits in scrapped Rs 500/1,000 currency adding, however, people with "large amounts of undisclosed monies will have to face the consequences under the tax laws."
Top I-T department officials had on Wednesday said the government's directive to them is "very clear", saying any instance of tax evasion and black money should be dealt with strictly, especially after two opportunities in the form of one-time stash declaration window has been provided.
In a surprise move, Prime Minister Narendra Modi had on 8 November announced demonetisation of Rs 500 and Rs 1,000 notes and introduction of the new Rs 500 and Rs 2,000 ones with additional security features.
--with PTI inputs