IT surveys 70 restaurants across India in ₹70,000 crore sales suppression probe

The Income Tax Department has launched a nationwide survey of around 70 restaurants across nearly 45 cities as part of a follow-up investigation into an alleged ₹70,000 crore sales suppression racket linked to manipulated billing software used to evade taxes.

Officials said the surveys were conducted under Section 133A of the Income Tax Act across several states, including Andhra Pradesh, Delhi, Maharashtra, Karnataka and Gujarat. The establishments under scrutiny are suspected to be linked to sales suppression worth about ₹700 crore in the current round of surveys.

The restaurants are spread across multiple cities ranging from Madurai and Shimla to Godhra and Guwahati, including major urban centres such as New Delhi and Mumbai. Surveys were also carried out in Rajahmundry, Nellore and Visakhapatnam in Andhra Pradesh, as well as in cities such as Pune, Thane, Gurugram, Noida, Chennai, Coimbatore, Ahmedabad and Bengaluru.

The nationwide action follows an earlier crackdown in Telangana, where detailed inspections at about 40 restaurants uncovered suspected tax evasion exceeding ₹490 crore. The probe initially began in Hyderabad after officials noticed discrepancies between the number of customers at certain outlets and the comparatively lower sales recorded in billing software.

Investigators later found that some restaurants allegedly manipulated point-of-sale systems by deleting selected cash transactions or bulk billing entries before filing tax returns, thereby underreporting income. Authorities analysed large volumes of data, including records obtained from a software company in Ahmedabad, to identify patterns suggesting sales suppression across several establishments.