The Income Tax Department has detected suppression of sales worth around ?408 crore in the food and beverage (F&B) sector after carrying out a nationwide verification exercise using data analytics, the Central Board of Direct Taxes (CBDT) said on Monday.
The department initiated the probe based on investigations conducted in November 2025, revealing instances of large-scale under-reporting of income, including deletion of bulk bills and modifications in records to suppress actual sales. Advanced analytics were applied to transactional data from around 1.77 lakh restaurants in the F&B sector.
“The data was compared with the turnover declared in their income tax returns. The analysis revealed large-scale under-reporting of income. In some cases, recorded sales were not fully reflected in financial accounts or tax filings, and certain transactions were excluded from reported sales,” CBDT stated.
Based on the findings, the department conducted surveys on March 8 across 62 restaurants in 46 cities across 22 states. The locations covered included Shimla, Murthal, Guwahati, Delhi, Mumbai, Chennai, Kolkata, Siliguri, Godhra, Ahmedabad, Bengaluru, Kollam, Kochi, Madurai, Coimbatore, Raipur, Bhopal, Indore, Ajmer, Jaipur, Gurugram, Chandigarh, Ludhiana, Koderma, Patna, Cuttack and Puri, among others.
The tax department said it is promoting voluntary compliance through the SAKSHAM NUDGE campaign, encouraging taxpayers to correct discrepancies. In the first phase, emails and messages will be sent to about 63,000 identified restaurants, advising them to update their returns under Section 139(8A) of the Income Tax Act before March 31, 2026.
“This nationwide drive stemmed from the investigation conducted by the Hyderabad tax office on restaurants. Going forward, we expect to see many more such large-scale investigations/surveys through innovative use of data analytics to widen the tax base and encourage people to comply voluntarily,” said Amit Maheshwari, partner with AKM Global.
According to Samir Kanabar, partner with EY, we are in the age of information sharing, capturing data in digital form, data analytics, and now data is being analysed to provide better insights on income escaping the tax ambit. “It is important for taxpayers to reconcile or explain the discrepancies as well as demonstrate that due taxes have been paid in such situations. To that extent, taxpayers will be well equipped to defend any gaps.”
“Voluntary compliance is one of the windows which allows taxpayers to file updated tax returns and pay appropriate taxes; this mitigates the penalties/prosecution. It will be interesting to watch how this spans out with Revenue armed with digital data,” Kanabar said.
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