- Over sixty Nagpur restaurants face reopened tax assessments following a massive investigation into reported income gaps.
- Authorities used AI to compare billing platform data against official income tax and GST filings.
- Allegations include bulk deletion of bills and routing digital payments to personal bank accounts.
More than 60 prominent restaurants and food outlets in Nagpur face reopened tax assessments after investigators found alleged gaps between their reported income and transaction records, according to a July 13, 2026 report. The Income Tax Department is examining claims that businesses suppressed sales and under-reported turnover. Notices have gone to the identified establishments.
The cases emerged from an analysis of restaurant billing and payment data. Officials compared records from PetPooja, a restaurant billing platform, with income-tax returns and GST filings. Significant differences prompted the Investigation Wing to forward its findings to officers responsible for reopening completed assessments.
The department has not published the full list of outlets. The cases center on alleged tax evasion through deleted bills and payments routed outside business accounts.
Free toolSubstantial Presence Test CalculatorA Central Board of Direct Taxes press release dated March 9, 2026, described the national exercise this way:
"During the exercise, it was found that several restaurants were engaged in deletion of bulk bills and other modifications to suppress the actual sales."
The local review follows a nationwide data operation that examined 60 terabytes of transaction information from approximately 1.77 lakh restaurants. Officials used artificial-intelligence analytical tools to compare the data with tax filings.
Deleted bills and private UPI accounts form the core allegations
Investigators are examining whether restaurants used PetPooja functions to remove entire blocks of cash-sale records before filing returns. The material reviewed by officials indicates that some businesses could delete as much as 30 days of billing data.
The inquiry also identified a separate payment pattern. Some outlets allegedly directed UPI payments to the personal bank accounts of relatives or associates instead of their registered business accounts.
PetPooja founders and directors Parthiv Patel and Apurv Patel are named in the investigation’s background. The software, founded in 2011, allegedly contained a concealed function that allowed users to edit or delete billing records in bulk.
The investigation began with a routine check in Hyderabad in late 2024. That review involved a local biryani chain and found nearly ₹13,317 crore in allegedly suppressed sales through invoice deletion.
National data points to a wider restaurant review
The wider exercise produced several figures cited by tax authorities and government officials:
| Measure | Figure or date |
|---|---|
| Restaurants whose data underwent analysis | Approximately 1.77 lakh, or 177,000 |
| Transaction data analyzed | 60 terabytes |
| Restaurants surveyed on March 8, 2026 | 62 across 46 cities |
| Preliminary sales suppression from that survey | ₹408 crore |
| Estimated concealed turnover since the 2019–20 financial year | ₹70,000 crore |
| Restaurants identified for SAKSHAM NUDGE outreach | 63,000 |
The March 8 survey found preliminary sales suppression of ₹408 crore across 62 restaurants in 46 cities. Officials estimated that restaurants had concealed ₹70,000 crore in turnover nationwide since the 2019–20 financial year.
The agency also used the SAKSHAM NUDGE campaign, short for “Non-Intrusive Usage of Data to Guide and Enable,” to ask 63,000 restaurants to voluntarily update their returns. The voluntary-compliance deadline was March 31, 2026.
Voluntary corrections preceded the Nagpur assessments
Pankaj Chaudhary, Minister of State in the Ministry of Finance, told the Rajya Sabha that SAKSHAM NUDGE campaigns had produced more than ₹7,000 crore in revenue impact through voluntary updates.
The campaign’s approach initially emphasized voluntary compliance. Officials later signaled that businesses ignoring the advisories could face stricter legal action.
Deepak Prakash, a Rajya Sabha member, raised questions about scrutiny of returns and delays in refunds connected with the NUDGE campaigns. Those questions added parliamentary attention to the department’s use of data-led outreach.
The current cases represent the next stage: completed assessments may be reopened where billing records, bank transactions, returns and GST filings do not align. The July 13 findings were forwarded to Nagpur’s cadre controlling officers for action involving the 60-plus restaurants.
Officials are shifting from notices to enforcement
The investigation’s methods reflect a broader move toward automated comparisons rather than relying only on physical inspections. Billing software records, digital payments and tax filings can expose differences across several reporting systems.
Simran Shrivastava’s July 13 account documented the local findings and the officials’ explanation of the PetPooja comparisons. The review remains focused on establishments where the discrepancies were large enough to justify reopening assessments.
The restaurant sector is also facing pressure from a crackdown on mandatory service charges and higher commercial LPG costs. Those pressures form part of a wider reckoning for India’s food and beverage businesses in 2026, but the assessments will turn on each outlet’s records.
The March 31 voluntary-update deadline has passed. The next step for the identified businesses is the reassessment process, as officers examine whether deleted bills, redirected UPI receipts or other differences changed the income reported to tax authorities.
