An officer said that field enquiries uncovered a trend where consultants lured gullible employees into claiming such wrongful refunds.
Income Tax Department office in Hyderabad. (Official Website)
The Income Tax (I-T) Department has taken several initiatives to ensure ease of compliance for taxpayers and encourage voluntary compliance, said principal Income Tax chief commissioner of Andhra Pradesh & Telangana, Mitali Madhusmita.
Addressing a press conference on the “Issue of suspicious refunds being claimed by certain Taxpayers” at IT Towers in Masab Tank in Hyderabad on Friday, 7 July, she said the Income Tax return form has been simplified and the process of e-filing has been made seamless.
The department said it reposed trust in its taxpayers, as was evident from the fact that no proof of deductions or exemptions claimed was required to be uploaded while filing the returns.
Further, the returns are also processed expeditiously and refunds were automatically credited to the bank account of the taxpayer, said the officer.
The Income-Tax Department also monitors the correctness of returns filed by taxpayers, including the eligibility of deductions and exemptions claimed by them.
During such an exercise, it has been 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 deductions/exemptions, the officer said in a statement.
“Many of the assessees 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 PAN based in Andhra Pradesh/Telangana,” the statement added.
The officer said that field enquiries suggested a trend that gullible employees get lured into claiming such wrongful refunds on the advice of intermediaries and peers, without realising the consequences thereof.
“Recently, surveys were conducted on consultants and intermediaries and incriminating evidence about such malpractices has been found. The persons admitted to have filed large numbers of returns with bogus deductions or exemptions and got refunds of substantial amounts for their clients, in return for some commission,” Madhusmita said.
“Names of taxpayers for whom such returns were filed, have been found recorded 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, she added.
Many such taxpayers have already filed updated returns and many more are in the process of doing so. Further, action against such consultants and intermediaries is also being initiated.
According to the Income Tax Act, 1961, misreporting income and claiming wrongful deductions will attract stringent actions such as a penalty of 200 percent, prosecution that can also lead to imprisonment, and others.
However, those who have filed such claims and taken wrongful refunds from the department can file updated returns u/s 139(8A) for Assessment Year (AY) 2021-22 and annual year 2022-23 and deposit due taxes as per section 140B.
For AY 2023-24, revised returns can be filed u/s 139(5) in those cases where the original return has already been filed.
Given the gravity of the situation, the department urged all such taxpayers of Andhra Pradesh and Telangana 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 expeditiously file updated/revised returns, as applicable, if claims made by them are unsubstantiated.
For any query/assistance, the taxpayers can contact the Aayakar Seva Kendras in the local Income Tax Offices, consult www.incometaxindia.gov.in, or call the helpline numbers 18001030025/18004190025.
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