The Income Tax Department carried out search and seizure operations at the headquarters and one of the branches of an urban credit cooperative bank located in Maharashtra and blocked Rs 53.72 crore, informed Saturday the Central Commission for Direct Taxes (CBDT).
The search and seizure operation took place on October 27.
According to CBDT, the residence of the president and one of his directors was also searched.
CBDT said analysis of bank data on Core Banking Solutions (CBS) and statements from key individuals recorded during the research action revealed the glaring irregularities in the opening of bank accounts.
“More than 1,200 new bank accounts were opened in said branch without PAN. Investigations revealed that these bank accounts were opened without following KYC standards and all account opening forms are completed by bank staff and they put their signature / thumb impressions, ”the CBDT statement read.
He informed that in these accounts, several cash deposits, each with an exact denomination of Rs 1.9 lakh, were made for a total of Rs 53.72 crore.
“Of these, over 700 bank accounts have been identified which have been opened in series, where cash deposits of over Rs 34.10 crore were made immediately within 7 days of opening the bank accounts, mainly during the period of August 2020 to May 2021, “It said.
These deposits have been structured to avoid the mandatory PAN requirements for cash deposits above Rs 2 lakh. The money was then converted into term deposits at the same branch.
Local investigations into a few cases of these account holders have shown that these people were unaware of cash deposits in the bank and categorically denied any knowledge of these bank accounts or even term deposits, CBDT said.
The chairman of the CMD and the branch manager could not explain the source of the cash deposits and agreed that they were made at the request of one of the directors of the bank, who is a prominent man of local business engaged in the grain trade.
Based on the evidence gathered and the statements recorded, CBDT withheld the total amount of Rs 53.72 crore.
Further investigations are in progress.