As the Income-Tax department gears up for a full-scale assessment exercise of what it alleges is money “laundered” during the ongoing demonetisation drive, a disconcerting fact is that the total number of direct tax cases in which criminal prosecution complaints have been filed during just the first seven months of this fiscal are already the highest in the last four years. This trend is only expected to be reinforced further in the coming months as the taxman cracks down on alleged laundering of money during the currency recall window.

Apart from the sharp spurt in the direct tax cases, the trend during the first seven months of 2016-17 shows that the number of indirect tax cases are nearly equivalent to what was filed during the whole of last fiscal and higher than the number of cases filed in the whole of 2014-15.

The number of direct tax cases where criminal prosecution complaints have been filed and are pending before the courts were recorded at 4,853 in 2016-17 (April-October) as against 4,585 cases in 2015-16, tax department data showed. The number of indirect tax criminal prosecution complaints filed and pending before the courts stood at 5,106 in the first seven months of this financial year compared with 5,165 cases in 2015-16 and 5,094 cases in 2014-15, it showed.

In these cases, after chargesheet is filed in the designated court, the matter is taken up by the court as per the provisions of Criminal Procedure Code. Specific details, including amounts involved in cases, under prosecution are not maintained by the Centre, officials said.

According to government officials, the Income-Tax department, in close coordination with the Enforcement Directorate, plans to kick off on January 1 a massive assessment exercise of what it alleges is “money laundered” by many during the demonetisation drive.

The government has given another chance to those with unaccounted wealth to come clean through the soon-to-be notified Pradhan Mantri Garib Kalyan Yojana (PMGKY). As per the scheme, a 30 per cent tax plus 33 per cent surcharge on the tax and a 10 per cent penalty is proposed to be levied on the undisclosed income in the form of cash and deposits along with a zero-interest deposit scheme for four years, wherein the declarants will be supposed to park a quarter of their total deposit.

Earlier this year, the government had revised the monetary limits for filing of appeals by the CBDT before the Income Tax Appellate Tribunal and High Courts and Special Leave Petitions with Supreme Court to Rs 10 lakh, Rs 20 lakh and Rs 25 lakh, respectively.

The CBEC had also asked its officers to withdraw all cases in high courts and CESTAT where there is a precedent Supreme Court decision and against which no review is contemplated by the department in an effort to manage disputes and reduce litigation and had asked its chief commissioners or principal commissioners to identify the cases fit for withdrawal.