More than 60 top restaurants and food outlets in Nagpur have come under the Income Tax (IT) Department’s scanner for allegedly suppressing their actual sales and evading taxes on a large scale. The action follows a nationwide investigation into alleged misuse of PetPooja billing software, which is suspected to have helped businesses under-report their turnover. Using artificial intelligence-based data analytics, the IT Department found major differences between the sales recorded in the software and the figures declared in Income Tax and GST returns. Officials believe the discrepancies point to large-scale tax evasion over the past few years. Based on these findings, notices were issued to reopen old assessment cases of nearly 60 establishments in Nagpur.

 

The action is a part of a wider countrywide crackdown that began after investigators uncovered similar irregularities during searches in Hyderabad, where billing records reportedly showed turnovers far higher than those disclosed to tax authorities. According to IT Department sources, evidence collected during the national investigation has now been shared with the Nagpur unit for detailed scrutiny and further legal action. Officials said each case will be examined individually to determine the actual turnover, the extent of concealed income and the tax liability arising from the alleged suppression of sales. PetPooja, founded in 2011 by brothers Parthiv and Apurv Patel, contains a concealed functionality that enables users to edit or delete billing records in bulk within a selected period. While restaurant billing software permits limited corrections, IT Department has alleged that the feature could be used to manipulate sales records on a large scale.

 

Officials have identified two principal methods through which turnover was suppressed. In one, completed cash transaction bills were deleted in bulk after customers had paid, hence removing records of actual sales. In the other, bill values were reduced without disturbing sequential invoice numbers by selectively deleting items from completed bills, hence making routine scrutiny more difficult. IT sleuths have also found instances where UPI payments were routed to personal bank accounts of relatives or associates instead of official business accounts, keeping portions of turnover outside declared revenue. Officials shared that AI-driven analytics compared PetPooja transaction logs with turnover declared in IT returns and GST filings, identifying establishments where significant differences warranted reopening of assessments.

 

The Investigation Wing forwarded details of suspected cases to Nagpur’s cadre controlling officers, who have initiated proceedings to reopen completed assessment cases. Officials explained that cases can be selected for scrutiny through the Computer Assisted Scrutiny Selection (CASS) system when declared income appears much lower compared with reported turnover. However, where fresh evidence of possible tax evasion emerges within the permissible statutory period, previously completed assessments can also be reopened. Sources said the PetPooja transaction data has become the basis for reopening of several such cases.