By Arun Pratap Singh
Garhwal Post Bureau
Dehradun, 19 Mar: Following the exposure of large-scale irregularities involving concealment and misreporting of financial transactions by cooperative banks in Uttarakhand, the Income Tax Department is reportedly considering a major crackdown, including the imposition of heavy penalties on the erring institutions on the banks concerned. It may be noted that the action is under consideration after investigations have recently unearthed undisclosed and inaccurately reported transactions amounting to hundreds of crores of rupees, raising serious concerns over financial transparency and regulatory compliance in the cooperative banking sector in the State.
The department has adopted a stringent stance after long-standing suspicions regarding irregularities in transaction reporting by these banks have been revealed. Acting on these inputs, survey and verification drives were conducted at cooperative banks in Uttarkashi, Kotdwar and Kashipur. Officials were taken aback by the findings, which indicated that substantial financial transactions that were mandatorily required to be reported had either been concealed or incorrectly disclosed.
Investigations have revealed that banks in Uttarkashi, Kotdwar and Kashipur allegedly suppressed transactions worth around Rs 800 crores, while details of nearly Rs 400 crores worth of transactions were inaccurately reported. In total, information relating to approximately Rs 1,200 crores worth of transactions was either withheld or misrepresented, thereby preventing the Income Tax Department from receiving accurate financial data.
Under prevailing norms, the banks are required to report high-value transactions to the Income Tax Department in a timely and accurate manner to facilitate monitoring of potential tax evasion and ensure financial transparency. In this case, the apparent disregard for statutory requirements has been viewed as a serious violation warranting penal action.
It may be reminded here that the investigation covered a period of four years, from the financial year 2021–22 up to the present, and was carried out under Section 133A of the Income Tax Act, which empowers authorities to conduct surveys and examine records. During the course of the inquiry, departmental teams carried out a detailed scrutiny of bank records, accounts and reporting systems, uncovering multiple instances of high-value transactions that had not been disclosed at all.
Officials indicated that the nature of discrepancies suggests either deliberate concealment of information or serious deficiencies in reporting mechanisms, both of which attract punitive action under the law. The department is now in the process of determining the quantum of penalties, which will be based on the scale of violations and the gravity of non-compliance.
Sources suggest that the penalties could be substantial, potentially placing significant financial strain on the banks concerned. Meanwhile, the District Cooperative Bank in Haridwar has also come under the scanner of the Income Tax Department. Preliminary findings there indicate the possibility of large-scale under-reporting, and sources believe that the magnitude of discrepancies in Haridwar could surpass those detected in Uttarkashi, Kotdwar and Kashipur. However, for the present, the penalty process is being initiated against the banks in Uttarkashi, Kotdwar and Kashipur, while action in Haridwar is likely to follow after the completion of the ongoing investigation.
The developments have triggered a wider debate in policy and financial circles related to systemic issues in cooperative banking, including gaps in digital reporting, weak internal audit systems and limited regulatory oversight compared to commercial banks. Experts note that despite increasing digitisation and integration with central reporting frameworks, several cooperative banks continue to lag in compliance standards, making them vulnerable to regulatory scrutiny and operational lapses. The findings of the Haridwar probe, once finalised, are likely to further shape the course of action and could potentially widen the scope of this crackdown in the state.
