'Rs 4.5k-cr scam': Four Karnataka sub-registrar offices under I-T lens, including 3 in Bengaluru

Bengaluru: The Intelligence and Criminal Investigation Directorate of Income Tax (I-T) Department has unearthed unreported taxable transactions worth nearly Rs 4,500 crore during its recent spot verification at four sub-registrar offices, three of them in Bengaluru — Banaswadi, KR Puram and Varthur — and one in Mysuru North at Mysuru.

During the visit, I-T officials detected a massive irregularity in reporting high value transactions to the I-T department by sub-registrars in the last three financial years, 2021-22, 2022-23 and 2023-24.

During this period, total transactions of Rs 27,552 crore pertaining to non-PAN transactions, besides high value transactions worth nearly Rs 4,500 crore, have not been reported by sub-registrars to the I-T department.

"The survey action revealed hundreds of unreported high value transactions by these sub-registrars estimated at more than Rs 4,500 crore for the past three years. Additionally, it was also detected that despite obtaining PAN from the buyer and seller, it was not reported to the I-T department," said the source.

According to information from I-T department sources, by not reporting these transactions, the four sub-registrars have facilitated tax evasion. 

Following the revelations, the I-T department has decided to verify transactions at sub-registrars across the state. "A similar exercise will be undertaken at all sub-registrar offices across the state," said an I-T department source. 

Surprised with the scale of under-reported transactions, the official from the I-T department said, "We have initiated a similar crackdown on all errant sub-registrars and plan to initiate penal and prosecution action. Meanwhile, the IG Registration has been informed of the irregularities."

I-T department sources said it is mandatory for sub-registrars to obtain PAN of the buyer and seller where the sale value of property exceeds Rs 10 lakh and report sale transactions exceeding Rs 30 lakh to the I-T department through an annual Statement of Financial Transactions.

The official source said reporting of high value transactions in immovable properties by the sub-registrars is critical in promoting voluntary compliance by taxpayers wherein income tax due on sale of property and investment is fully disclosed in the income tax return.

It is learnt that the Government of Karnataka has written to the income tax department to provide a facility to authenticate PAN to eliminate impersonation of PAN.

Speaking to DH, V Rashmi Mahesh, Principal Secretary department of Revenue said, "We are also working with the I-T department and have asked them for VPN integration with Kaveri portal to verify PAN credentials whenever PAN is quoted as ID proof for registration. We have also agreed to give login provision in Kaveri portal for all enforcement agencies. Regarding this particular case, we will definitely initiate action if the I-T department writes to us."