File rectified ITR before March 31 or face coercive actions: J&K government tells erring education department employees

Sources said that the matter came to light during analysis of the refunds issued in the Financial Year 2021-22 and 2022-23 in respect of Income Tax Returns.

Mar 28, 2023

JAMMU: The Jammu and Kashmir Government has asked its employees in the Education Department to file "rectified" income tax returns before March 31 in case they have claimed excessive refund from the Income Tax Department on the basis of "fabricated documents".

This followed a communiqué from Principal Commissioner of Income Tax, Srinagar, M P Singh, seeking intervention of the UT Chief Secretary Dr Arun Kumar Mehta for issuance of necessary direction to all such employees to update their ITR by March 31, 2023, or face "coercive actions".

A circular issued on Monday by the School Education Department's Director Finance Iftikhar Hussain Chauhan under the subject "fraudulent claims of refunds by employees of various departments of UT of Jammu and Kashmir" informed all the heads of departments, drawing and disbursing officers of subordinate offices in particular and all employees in general working under the administrative department of the School Education Department that a meeting was convened in this regard by the Principal Commissioner, Income Tax, in his office chamber on March 24.

Pointing out that the meeting was attended by DDOs of various institutions, it said that the Principal Commissioner, Income Tax, intimated that the number of income tax refund claims of employees has increased manifold in the last two years as they are using the services of some tax professionals wherein TDS deducted from their salaries by the DDO is refunded by using various sections of the Income Tax on the basic of fabricated documents.

"These bogus refund claims have been viewed seriously by the Income Tax Department and details of such employees who have claimed refunds have been prepared and intimated to the Chief Secretary to Government, J&K," the circular read.

Pointing out that before their names are forwarded to their respective departments, it said that "one time relaxation has been given to such claimants till March 31, 2023 that a rectified ITR as (ITR-U) may be filed otherwise it shall have some serious repercussions followed by departmental enquiries and imposition of penalties under section 270(a) and 276(C) of the Income Tax Act 1961".

Singh, in a letter dated March 17, 2023, had sought intervention of the UT Chief Secretary for issuance of directions to all such employees to update their Income Tax Return (ITR-U) along with penalty by March 31, 2023 or face coercive actions.

Pointing out that the Income Tax Department "has complete details of all persons who have claimed excessive/bogus deductions to claim huge refunds of TDS made by their DDOs", he wrote, "It is a matter of grave concern that a large number of employees belonging to various departments of UT of Jammu and Kashmir viz., Education, Health, PDD, PHE, Cooperatives, Sports, Tourism, Industry, PWD, Police and other departments have indulged in such malpractice."

"Such cases of bogus refund may lead to scrutiny and recoveries of demand besides levy of penalty under Section 270A of the Income Tax Act, which is 200 per cent of the tax levied. Further, the case of such employees may also be taken up for prosecution under Section 276C of IT Act," he added.

Meanwhile, sources said that the matter came to light during analysis of the refunds issued in the Financial Year 2021-22 and 2022-23 in respect of Income Tax Returns filed by the tax payers of Jammu and Kashmir for Assessment Years 2020-21, 2021-22 and 2022-23, he wrote.

The analysis of data revealed that a large number of individual taxpayers, particularly those who derive income from salaries, have claimed excessive deductions under various Sections of the Income Tax Act viz. 80C, 80D, 80DD, 80DDB, 80EB, 80E, 80EE, 80G, 80GGC etc without actually being eligible for such deductions.