3 min readNew DelhiMar 10, 2026 06:29 AM IST
In an extensive exercise against underreporting of income in the food and beverages sector, the Income Tax Department carried out surveys against 62 restaurants across 22 states covering 46 cities including Shimla, Murthal, Chandigarh, Ludhiana, Godhra, Ahmedabad, Kollam, Kochi , Madurai, Guwahati, Delhi, Gurugram, Mumbai, Chennai, Kolkata. An initial analysis suggests that the underreporting of sales could be of around Rs 408 crore in this round of surveys that were carried out on Sunday, the Department said.
The wide-scale action against restaurants comes weeks after the Income Tax Department had undertaken investigations into the tax evasion pattern for a biryani chain in Hyderabad, alleged to have suppressed Rs 70,000 crore of sales through billing software manipulation.
The Department is making use of AI analytics to uncover the tax evasion route adopted by these restaurants from the transactional data of about 1.77 lakh restaurants collected during the investigation.
“The Income tax Department carried out an investigation relating to the tax evasion pattern in the food & beverage sector in November 2025. During the exercise, it was found that several restaurants were engaged in deletion of bulk bills and other modifications to suppress the actual sales. Advanced analytics of transactional data from about 1.77 lakh restaurants in the F&B sector was carried out using Al-enabled analytical tools,” the Department said in a statement.
The data was then compared with the turnover declared by the restaurants 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,” it said.
On March 8, surveys were then conducted on 62 restaurants across 46 cities in 22 states. Locations of the surveys 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, Puri, among others, sources said.
“On a preliminary basis, the exercise revealed suppression of sales amounting to around Rs 408 crore. Investigations in this regard are underway,” the Department said.
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A survey, conducted under Section 133A of the I-T Act, is usually a precursor to a search and seizure operation, and takes place only at business premises. I-T officials look into the books of accounts, bank accounts, cash, stock and non-valuable documents during a survey.
The Department has now commenced the SAKSHAM NUDGE campaign advising taxpayers to correct their mistakes. In the first phase, emails and messages will be sent to the identified restaurants. The Department has asked these restaurants to file updated returns under section 139(8A) of the Income Tax Act before March 31.
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