After giving a warning to employees against adopting fraudulent means to claim tax refunds, the Income Tax Department has singled out over 28,000 government servants for claiming bogus refunds worth crores of rupees.
These employees have reportedly attached fake documents while filing their income tax returns to claim refunds.
Those under the scanner of the Income Tax Department included police and paramilitary force personnel deployed in different parts of Jammu and Kashmir.
Reports said that these frauds were detected during the analyzing Income Tax Returns (ITRs) filing seasons in 2020-21 and 2021-22.
The alleged irregularities came to light sometime back after the Tax Deducted at Source (TDS) wing of the department located in Srinagar found that a number of people who are assessed in the Union Territory of J-K had claimed excessive and ineligible deductions.
FIRs have already been filed against CA, 404 others.
Notably, the Income Tax (IT) Department, Srinagar, has already filed FIRs against a Chartered Accountant and 404 other persons in Jammu and Kashmir in bogus refund cases.
On Friday IT Department had informed that the FIRs had been filed by Income Tax Officer (Technical), Srinagar, Akash Kumar Meena with the Crime Branch of J&K Police on the direction of the Principal Commissioner of Income Tax, J&K and Ladakh M P Singh based on the investigation carried out by the Income Tax Officer (TDS), Srinagar.
In the FIRs, it had been alleged that a Chartered Accountant namely Imran Amin Dara of Srinagar, and 404 other persons have entered into a conspiracy and defrauded the central government exchequer of Rs 16.72 crore between financial years 2017-18 to 2019-20.
The FIRs addressed to the Senior Superintendent of Police, Crime Branch, Srinagar, the IT Department has described the modus operandi of the accused in minute details and shared their complete details with the Crime Branch like names, addresses, PAN, bank accounts, and the amounts fraudulently claimed as refunds by filing incorrect IT returns clandestinely.
Reports said that all the culprits have taken more than Rs 4 lakh as refunds by filing incorrect IT returns for various years. 405 persons had been booked under Sections 420, 468, 471, and 120 B of the Indian Penal Code and Ranbir Penal Code read with Section 66-D of the IT Act.
Employees already warned against claiming refunds on forged documents
In February this year, the Jammu and Kashmir Government had warned its employees against fraudulent claims of Income Tax refunds.
Authorities of the Union Territory of Jammu and Kashmir had directed all the Heads of Department (HoD) to take action against the erring employees.
It was intimated that the number of income tax refund claims of employees has increased manifold in the last two years as the employees are utilizing the services of some tax professionals wherein TDS deducted from their salaries by ODO is refunded by using various sections of Income Tax on the basis of fabricated documents.
These bogus refund claims have been viewed seriously by the Income-tax Department and details of such employees who have claimed refunds have been prepared and intimated to the Chief Secretary of Jammu and Kashmir.
Employees involved in committing fraud have to pay 200% penalty
According to a circular issued by the government in March this year, "Returns so filed by the taxpayers are analyzed subsequently, by the Director General of Income Tax (Systems), and the cases of fraudulent claims / bogus refunds are selected for scrutiny and in that eventuality, the taxpayer has to pay a heavy price that includes a levy of tax and penalty upto 200% for making fraudulent claims".
"The Income Tax Department provides a limited window in the shape of ITR-U under section 139(8A) which provides that the taxpayers can update their returns of the Income Tax by paying their actual due tax along with penalty which is 50 percent of the additional tax + interest for Financial Year 2019-20 (AY 2020-21) and 25% for Financial Year 2020-21 (AY 2021-22) if the ITR-U is filed before 31.03.2023," the circular reads.
The possibility of future coercive actions under the law can be mitigated through truthful and voluntary tax payment and declaration of the correct income.
