Income tax department flags ₹408 cr sales mismatch in restaurants; 63,000 outlets told to revise ITRs by March 31

The outreach is part of the department’s NUDGE (Non-Intrusive Usage of Data to Guide and Enable) campaign, which focuses on encouraging voluntary tax compliance using data analytics rather than immediate enforcement action.

As part of the exercise, officials conducted surveys at 62 restaurants across 46 cities in 22 states. Preliminary findings suggested that sales worth about ₹408 crore may have been suppressed.

The survey covered multiple cities, including Delhi, Shimla, Murthal (Haryana), Gurugram, Guwahati, Mumbai, Chennai, Kolkata, Siliguri, Godhra, Ahmedabad, Bengaluru, Kollam, Kochi, Madurai, Coimbatore, Raipur, Bhopal, Indore, Ajmer, Jaipur, Chandigarh, Ludhiana, Koderma, Patna, Cuttack and Puri, among others.

Authorities said further investigation into the discrepancies is currently underway.

The probe into the food and beverage sector began in November 2025. During the process, officials found that some restaurants were allegedly deleting bulk bills or modifying records in billing systems to suppress actual sales.

The department analysed transactional data from around 1.77 lakh restaurants using artificial intelligence tools and compared it with the turnover reported in tax filings. The analysis flagged several instances of large-scale under-reporting of income.

In certain cases, recorded sales did not fully appear in financial accounts or tax returns, while some transactions were entirely excluded from reported revenue.

Officials said the investigation gained momentum after the department’s Hyderabad investigation wing surveyed the premises of a company that develops restaurant billing software. During that exercise, authorities found indications that some hotels and restaurants may have been manipulating billing software to under-report income.