Income Tax issues Rs 36 crore notice to Gujarat man with Rs 12 balance in his bank account

The Income Tax Department has sent a notice to a resident of Ratanpur village in Gujarat's Sabarkantha district, who earns Rs 12,000 per month and has only Rs 12 in his bank account, asking him to clarify “unverified transactions” amounting to Rs 36 crores. The individual, Jiteshkumar Makwana, who works as an office assistant at an IT firm, claimed he had no knowledge of such transactions.

Makwana said he doesn’t earn enough to be required to file income tax returns and was shocked upon receiving the notice. “When I saw the Rs 36 crore notice, I froze. I kept staring at the paper, trying to make sense of it. I only have Rs 12 in my bank account,” he explained.

After receiving the notice, Makwana contacted the local police, who directed him to the cybercrime division. He said, “The unit sent me to the income tax office, where I was asked to contact GST [Goods and Services Tax] officials, who sent me back. I have just been going in circles.”  Though he initially assumed it was a case of mistaken identity, he was informed that this wasn’t the case.

Authorities suspect Makwana’s PAN (Permanent Account Number) may have been misused for filing fraudulent GST returns. An income tax official said the GST department flagged the suspicious high-value transactions. “An investigation against him is underway. This could be a case of billing fraud, where someone’s bank and personal details are misused, maybe without their full understanding of the consequences.” the official added.

As the sole earner in a family of five, Makwana checked his bank records but found no irregularities. The tax notice, dated March 29, was issued under Section 148A (1) of the Income Tax Act, giving him a chance to respond before a formal reassessment. The notice accused him of hiding Rs 36.03 crore in transactions during the 2020–21 financial year.

It pointed to suspicious financial activity flagged on a portal under the Central Board of Direct Taxes, aimed at tracking potentially risky behavior. The document cited a Rs 15.97 crore turnover reported in GSTR-3B filings and an Input Tax Credit claim exceeding Rs 20 crore, all linked to a company called JK Enterprise, associated with an individual named Jayesh Bharatbhai Nakrani. These transactions were neither declared nor taxed.

Makwana has been asked to clarify his business operations and provide sales and purchase records, bank details, and any documents connected to JK Enterprise by April 13. Failure to respond could lead to further action under Section 148, including reopening of his tax assessment.