Gorakhpur: A five-day-long intensive search operation conducted by the Income Tax Department across the Gorakhpur division of Uttar Pradesh has uncovered strong indications of large-scale tax evasion involving six major business groups. According to official sources, the searches have yielded concrete evidence pointing to undisclosed income and financial irregularities amounting to nearly ₹500 crore. With the operation concluding on Saturday evening, tax authorities have now begun a detailed scrutiny of seized documents and digital data.
During the raids, officials reportedly seized around ₹1 crore in cash, gold and diamond jewellery worth several crores, and more than 15,000 pages of documents. Sources also confirmed the detection of approximately 15 bank lockers, from which jewellery valued at over ₹10 crore was recovered. The scale and spread of the seizure indicate a long-standing and systematic effort to conceal taxable income.
Organised Tax Evasion Across Multiple Sectors
The search operation primarily targeted business groups associated with the real estate, edible oil and liquor trading sectors, which investigators believe have been at the centre of organised tax evasion practices for several years.
In the real estate sector, officials found evidence of unaccounted cash transactions, property registrations executed at values far below prevailing market rates, and artificial suppression of project costs in official records. According to senior officers involved in the probe, substantial cash payments were made during land purchases and construction projects, none of which were disclosed in income tax returns.
Similarly, in the edible oil and liquor businesses, investigators identified manipulation of invoices and sales records to conceal actual profits. Several documents suggest a significant mismatch between real sales figures and entries recorded in statutory registers, raising suspicions of deliberate profit suppression.
Use of Shell Companies and Benami Accounts
The investigation has also revealed that certain business groups allegedly used shell companies and benami bank accounts to route and disguise illicit transactions. Documents indicate that unaccounted funds were channelled through individuals acting as name-lenders, who were paid commissions for allowing their identities and accounts to be used. Tax officials are now examining these arrangements to trace the ultimate beneficiaries of the concealed income.
AI and Data Analytics Uncover Hidden Networks
A key feature of this operation was the use of Artificial Intelligence (AI) and advanced data analytics by the Income Tax Department. By analysing banking transactions, property deals, registry records, investment documents and data extracted from computer servers, investigators were able to map out a complex network of tax evasion.
Officials said AI-driven analysis helped establish patterns of systematic undervaluation of properties, especially in real estate transactions, aimed at reducing tax liabilities. Cross-verification of multiple datasets played a crucial role in identifying discrepancies that may have otherwise gone unnoticed.
Clues Point to Overseas Assets
Sources further disclosed that among the seized documents were papers related to properties located abroad. In addition, ownership documents for properties situated in Gorakhpur, Deoria, Lucknow, Kanpur and Delhi were also recovered. Authorities are now verifying the sources of funds used for acquiring these assets.
If the explanations regarding the origin of funds are found unsatisfactory, the properties may be referred for action under the Benami Transactions (Prohibition) Act. Separate investigations are being initiated to determine whether illegal funds were laundered through layered investments.
Show-Cause Notices to Be Issued Soon
Following the conclusion of the search operation, the Income Tax Department is preparing to issue show-cause notices to the concerned business groups based on the seized evidence. The notices will seek detailed explanations regarding undisclosed income, asset acquisitions and suspicious financial transactions.
According to departmental sources, stringent penalties, tax reassessment and legal proceedings are likely if the responses fail to meet statutory requirements. Officials have also indicated that further action against other suspected business entities cannot be ruled out.
The message from the tax authorities is unequivocal—the crackdown on tax evasion is set to intensify, and financial irregularities at any level will face strict consequences.
