Major Fraud: I-T sleuths find suspicious tax refund claims running into crores in AP, TS

Hyderabad: The sleuths of Income Tax have detected suspicious refunds being claimed by certain taxpayers running into crores of rupees.

The I-T officials found that a large number of salaried taxpayers of Andhra Pradesh and Telangana have claimed deductions/exemptions which are not correct and have claimed refunds based on those dubious calculations.

Principal chief commissioner of Income Tax, IRS Mitali Madhusmita said that many of the assesses that have come under the radar work in government departments, PSUs and prestigious IT companies. It is also noticed that a large number of such taxpayers work with companies based outside Andhra Pradesh and Telangana but have PANs based in the Telugu states. Many taxpayers have claimed refunds of as high as 75 per cent to 90 per cent of the TDS deducted by the employer.

What went wrong?

Field enquiries revealed a trend that gullible employees get lured into claiming wrongful refunds on the advice of intermediaries/peers, without realising the consequences. Recently, surveys on consultants/intermediaries were conducted, in which incriminating evidence about such malpractices has been found.

The persons admitted to having filed a large number of returns with bogus deductions/exemptions and have got refunds of substantial amounts for their clients, in return for commission. Names of taxpayers for whom such returns were filed have been found in their documents, which have since been impounded. On being questioned, some of the clients admitted to having got wrongful refunds based on ineligible deductions/exemptions. Many such taxpayers have already filed updated returns and many more are in the process of doing so. Further, action against such consultants/intermediaries is also being initiated, said the Income Tax department.

Punishment

Under the Income Tax Act of 1961, there are stringent consequences for misreporting income and claiming wrongful deductions. The consequences include interest at 12 per cent per annum, a penalty at 200 per cent of taxes and prosecution which may entail imprisonment.

However, those who have filed such claims and taken wrongful refunds from the department can file updated returns under sections 139(8A) for AY 2021-22 and AY 2022-23 and deposit due taxes as per section 140B. For AY 2023-24, revised returns can be filed under section 139(5) in cases where the original return has already been filed.

Given the gravity of the situation, the department urges all such taxpayers of Andhra Pradesh and Telangana states to reconsider their claim of deductions and exemptions made in the returns filed for AY 2023-24, AY 2022-23 and AY 2021-22 and to quickly file updated/revised returns, as applicable, if claims made by them are unsubstantiated.

For any query/assistance, the taxpayers may contact the Aayakar Seva Kendras in the local Income Tax offices or visit www.incometaxindia.gov.in or call helpline number 18001030025/18004190025. A video on how to file updated returns is available on YouTube.