The income tax department found understatement of sales ₹408 crore after conducting a nationwide survey of restaurants on allegations of tax evasion, the CBDT said on Monday.
After visiting their establishments on Sunday, the taxman is now sending emails and messages to as many as 63,000 such establishments “asking” them to update their Income Tax Returns (ITRs) by March 31.
“A nationwide survey was conducted in 62 restaurants in 46 cities in 22 states. The exercise tentatively revealed sales suppression of roughly ₹408 crore,” the Central Board of Direct Taxes (CBDT) said in a statement, adding that an investigation into the findings is ongoing.
The statement said the investigation began after the taxman launched an investigation into the food and drink industry in November 2025.
“During the exercise, several restaurants were found to be involved in bulk account deletions and other adjustments to suppress actual sales,” it said.
Advanced analysis of transaction data from around 1.77 lakh restaurants was done using AI tools, according to CBDT. This data was compared with the turnover reported by these stores, leading to the identification of a “large” understatement of revenue.
In some cases, recorded sales were not fully accounted for in financial accounts or tax returns, and some transactions were excluded from reported sales.
Officials told PTI that the probe began after the ministry’s investigation department in Hyderabad recently inspected the premises of a local company that makes software for restaurant invoicing. Some hotels and restaurants were found to have allegedly manipulated the software to show lower revenue.
