- Search and seizure operations in Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, and Madhya Pradesh have found concrete evidence of abuse across sectors
- The verification drive is backed by financial data, ground intelligence, and artificial intelligence tools
- The Department is now poised to take stern action against continued fraudulent claims, including penalties and prosecution wherever applicable
NE BUSINESS BUREAU
NEW DELHI, CHENNAI, JULY 14
The Income Tax Department has launched a nationwide crackdown on fraudulent tax refund claims, targeting rackets involving inflated deductions and false exemptions in Income Tax Returns. The operation began on Monday across 150 locations, including 18 in Tamil Nadu.
In a statement issued by the Central Board of Direct Taxes (CBDT), the department said it uncovered a series of organised scams where intermediaries and ITR preparers filed returns with fictitious claims under provisions of the Income-tax Act, 1961.
“Investigations have uncovered organised rackets operated by certain ITR preparers and intermediaries, who have been filing returns claiming fictitious deductions and exemptions,” the department noted. “These fraudulent filings involve the abuse of beneficial provisions, with some even submitting false TDS returns to claim excessive refunds.”
The verification drive is backed by financial data, ground intelligence, and artificial intelligence tools. Search and seizure operations in Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, and Madhya Pradesh have found concrete evidence of abuse across sectors.
Analysis revealed misuse of deductions under sections including 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDB. Employees of MNCs, PSUs, academic institutions, and entrepreneurs have been implicated in the fraud. According to the department, many were lured with promises of inflated refunds in exchange for a commission.
“Despite a fully e-enabled tax administration system, ineffective communication remains a significant hurdle in assisting taxpayers,” the statement said. It added that temporary email IDs were often used by agents to file bulk returns, which later went unattended, resulting in unread notices.
The Department stressed that its current enforcement drive builds on a year of voluntary compliance efforts. Outreach through SMS, email advisories, and physical campaigns led to around 40,000 taxpayers revising their returns in the past four months, voluntarily withdrawing bogus claims worth Rs 1,045 crore.
However, many remain non-compliant. “The Department is now poised to take stern action against continued fraudulent claims, including penalties and prosecution wherever applicable,” it said.
Taxpayers were again advised to avoid unauthorised agents and ensure their filings are accurate.
Tamil Nadu
Income Tax Survey/ Raid actions are underway in various parts of Tamil Nadu at 18 locations including Trichy, Coimbatore, Salem, Madurai, Chennai, Vellore, Erode, Tiruvannamalai, Villupuram, Theni, Sivagangai, Pudukkottai, Virudhunagar and Tirunelveli in the cases of persons who facilitated fake deductions under various sections of the IT Act and claim tax refunds fraudulently.
It is seen that Income Tax practitioners and intermediaries located in various parts of Tamil Nadu have aided and abetted several thousands of taxpayers in making fraudulent income tax refund claims, which are being covered today. Investigations are in progress at the premises spread over 18 locations and Income Tax sleuths are verifying the details and gathering evidences.
In the case of such agents based across various stations in state of Tamil Nadu, it was found that specific E mail IDs have been created by them for the purpose of filing fraudulent Returns of Income. From these E mail IDs, return are being filed running into several thousands and bogus refunds have been claimed running into several Crores. Incriminating evidences have been found and impounded during the survey operations and further investigations are in progress at all the premises.
