Income Tax Dept to proceed against Bogus Refund Claims

In a bid to prevent the bogus refund claims and evasion, the Income tax department is all set to launch some additional checks against persons who claimed a bogus refund based on fraudulent investments shown in tax return forms, CBDT Chairman Sushil Chandra has said.

In connection with this, the Central Board of Direct Taxes (CBDT) has set up a three-member committee to deal with the issues concerning “high-pitched” assessments wherein irrational tax demands are raised by tax officers, he said.

In a recent statement, the CBDT Chief regretted the practice of bogus refund claims by people and said that it was the time that people change their mentality and pay their due share of taxes honestly.

During the search operations in Mumbai, Bengaluru and certain parts of Punjab, the I-T department discovered that some fraudsters were encouraging taxpayers to claim refunds based on fictitious investments under 80C and towards housing loans.

“When we took that risk parameter and found from one I P address so many refunds are being filed which are of the same pattern, so some searches took place. So we have put another risk parameter into our system that if some fraudulent return is being filed then that refund has to be stopped,” Chandra said addressing an industry event here.

He pointed out the issues concerning “high-pitched” assessment and added that the Board has already set up a committee to look into such cases. “Many people came to us saying that our assessment is very high pitched, so we made ‘high-pitched’ assessment committee, which comprises of three principal commissioners wherein if you feel that your assessment is high pitched, you can approach the committee,” he said.

A high-pitched scrutiny assessment case is one where it is found that the addition of income was made on frivolous grounds, non-observance of principles of natural justice, or non-application of mind and gross negligence by the assessing officer in deciding a case.

If the committee decides that the assessment is “high-pitched”, it would stay the demand and steps would be initiated against the assessing officer. “Last year, we have transferred more than 12 assessing officers who were found indulging in high pitched assessments,” Chandra said.