In a significant crackdown on financial irregularities, the Income Tax Department has unearthed undisclosed deposits exceeding a staggering ₹125 crore at the Nirmal Ujjwal Credit Cooperative Society in Nagpur. The discovery was made during a detailed scrutiny conducted under the mandatory Statement of Financial Transactions (SFT) framework, which is designed to flag unreported income.
Major SFT Violations Uncovered
The investigation, spearheaded by the department's Intelligence and Criminal Investigation (ICI) wing, revealed multiple and serious breaches of reporting norms. Under SFT rules, cooperative societies are legally obligated to report specific high-value deposits to the tax authorities for cross-verification with the income returns filed by depositors.
Deposits in current accounts worth approximately ₹45 crore were not reported to the department. This is a clear violation of the SFT-3 provision, which mandates the disclosure of any cash deposit exceeding ₹50 lakh in a current account within a financial year.
In a parallel finding, another ₹45 crore in cash deposits parked in savings accounts also went unreported. This lapse falls under the purview of SFT-4 regulations, which govern the reporting of such transactions.
Widespread Non-Compliance with Reporting Rules
Beyond these large cash deposits, the tax sleuths found further non-compliance. The SFT-5 provision requires societies to report all deposits—whether made via cash or cheque—that exceed ₹10 lakh in any account. Sources confirmed that violations of this rule were also detected at Nirmal Ujjwal, adding to the scale of the oversight.
This action in Nagpur is not an isolated incident but part of a broader, ongoing drive by the ICI wing. The department has recently scrutinised several other cooperative institutions across the region in a bid to clamp down on the circulation of unaccounted money. Earlier, similar unreported deposits were found in a bank located in Chandrapur.
Implications and Ongoing Drive
The detection of such a substantial sum in unreported deposits highlights significant gaps in compliance by the credit cooperative society. The SFT framework is a critical tool for the Income Tax Department to track large financial transactions and match them with declared income, thereby curbing tax evasion.
The case underscores the department's intensified focus on the cooperative sector, which is often seen as vulnerable to being used for parking undisclosed funds. The findings are likely to lead to further scrutiny of the society's operations and may result in penalties and deeper investigations into the source of these deposits and the depositors involved.
