New Delhi, Nov 7 (PTI) - The Income Tax Department is set to issue notices to about one lakh entities and individuals, who deposited huge cash in banks post demonetisation and whose tax returns have been picked for detailed probe into suspected discrepancies, official sources said today.

Issue of notices will begin this week, they said.

In the first tranche, notices will be issued to 70,000 entities who deposited over ₹ 50 lakh in cash in banks but chose not to file tax returns or respond to the relevant Income Tax Department advisories, the sources said.

These notices will be issued under Section 142 (1) of the I-T Act (inquiry before assessment), they said.

Similarly, about 30,000 scrutiny notices will be issued to those whose deposits and tax returns were found to be starkly "deviant" from their past behaviour or their accounts showed huge monetary transactions post demonetisation, they added.

As many as 20,572 tax returns have been selected for the scrutiny procedure by the department post demonetisation, declared by the government on November 8 last year.

The rest of the scrutiny notices will be issued in due course, they added.

This action will be followed by the taxman issuing similar notices by next month to those individuals and entities who have made deposits between ₹ 25 lakh and ₹ 50 lakh post demonetisation.

These activities, they said, are part of the 'Operation Clean Money' that was initiated by the tax department in January this year to check black money generation post the note ban.

According to official data, accessed by PTI, 17.73 lakh suspicious cases involving ₹ 3.68 lakh crore have been identified by the taxman in 23.22 lakh bank accounts post demonetisation.

Responses from 11.8 lakh people for 16.92 lakh bank accounts have been received by the department through online medium till now.

"We will again ask people who made bank deposits of over ₹ 50 lakh to respond to our notices. If they do not cooperate, we will begin the legal action. Similar thing would be initiated against those who have made deposits less than ₹ 50 lakh but over ₹ 25 lakh," a senior I-T department officer said.

The I-T department had conducted 900 searches between November 9, 2016, and March this year, leading to seizure of assets worth ₹ 900 crore, including ₹ 636 crore in cash.

The searched led to the disclosure of ₹ 7,961 crore undisclosed income, according to the official data.

During the same period, the department conducted 8,239 survey operations leading to detection of ₹ 6,745 crore of black money, it had said.

Inquiry before assessment notices target post-demonetisation large cash depositors for scrutiny and potential legal escalation. Issuance of pre-assessment notices under Section 142(1) targets persons who made substantial post-demonetisation cash deposits and either did not file returns or whose returns and account activity deviate materially from prior behaviour; these notices commence inquiries to obtain explanations and documentation about sources and tax reporting, as part of the broader Operation Clean Money compliance and enforcement programme that couples automated deposit-identification with scrutiny, searches and surveys and contemplates escalation where taxpayers fail to cooperate.