IT Deptt warns against fraudulent tax claims

Srinagar, Dec 9: An outreach programme cum interactive session was organised by the Income Tax Department, J&K in collaboration with District Administration, Doda at the Office.

A statement said that the session was part of a series of outreach programmes titled “Mulaqat 2.0” being conducted by the department all across the J&K to raise tax awareness among the public and to caution them of the repercussions of making wrong claims in their ITRs.

The event was chaired by M.P Singh, Principal Commissioner of Income Tax, J&K and Ladakh alongwith other officers of the Income Tax Department including Rahul Padha (Joint Commissioner of Income Tax, Srinagar), M.L Dogra (Income Tax Officer, Udhampur), Karamvir (Income Tax Officer, TDS Jammu & Srinagar) & Ankit Dhaka (Tax Recovery Officer, Srinagar).

Around 250 DDOs & employees of various Government departments alongwith people from local trade associations & business fraternity attended the interactive session.

M.P Singh commenced the session by welcoming the attendees and highlighting the importance of taxes in nation-building and infrastructural development along with the significance of paying taxes honestly.

Subsequently, Rahul Padha took the stage and apprised the audience that last year Income Tax Department detected a bogus refund scam of large magnitude wherein it was noticed that a significant number of Govt. employees of almost all State departments Police/Paramilitary forces etc. were found indulged in claiming bogus deductions in the ITRs to get the most of TDS back as refunds.

The malafide practice has led to the leakage of hard-earned revenue of the department. Padha further highlighted that many taxpayers are also lured by various touts/ unauthorised agents and tax practitioners who by charging 20-30% commission file their ITRs and claim bogus deductions and exemptions to get money deducted as tax back.

He further emphasised that the Department owns complete data of such touts as well as the salaried taxpayers who have been claiming fake deductions and the culprits won’t be spared.

Furthermore, since DDOs of various Government departments and many representatives of trade associations of Doda district were present during the session, Karamvir, ITO, TDS made them aware about various provisions of TDS especially section 192 (TDS on Salary), 194C (Payments to Contractors), 194H(Commission or Brokerage), 194IA (TDS on payment on transfer of certain immovable properties), 194J (Fees for technical or professional services), 201 (Consequences of failure to deduct or pay taxes), 203(Certificate of tax deducted) etc.

DDOs were also advised to be extra cautious and grant only eligible deductions after verifying relevant documents from their employees.

While concluding the session, M.P Singh urged and cautioned the audience to refrain from making these fraudulent claims and tax their taxes honestly as the department is keeping a strict vigil on such persons and they will have to face the wrath of the department in the form of hefty penalties and imprisonment as well. He cited an example that in January 2023, CBI prosecuted 37 Govt. employees in Kerala including Navy officials for claiming bogus deductions in their Income Tax Returns and warned the audience that the same may happen in UT of J&K also if reference is made by the department.

“Furthermore, the employer department can also initiate disciplinary proceedings against erring employees. Therefore, for the benefit of employees, he advised that those who have already made this mistake must revise/ update their ITRs immediately without waiting for the deadline. He further stated that for a wrongly claimed refund of Rs. 1 lakh, the taxpayer may have to pay approximately 4 lakhs as tax which includes a penalty of Rs 2 lakhs @200% on the wrongly claimed amount of Rs. 1 lakh and interest under the section 234A/B/C. Apart from this counsel’s fees for representing the case before the department have also to be borne by the taxpayer.”

“Besides, there will be a lot of mental harassment & risk of prosecution also. The scrutiny selection may take place tomorrow or up to 3 years from the end of the relevant assessment year. Therefore, the wise thing is to revise your ITR within time and avoid making these mistakes in future.”