IT department asks tax payers to return ‘wrongly-claimed’ refunds to avoid penalty

SRINAGAR: Taking note of the fraudulent and bogus deductions, the Income Tax department has urged all tax payers to return the "wrongly-claimed" refunds before 31st December to avoid penalty and prosecution, officials said today.

"If you have claimed any deduction in your ITR for FY 2022-23 (Assessment Year 2023-24) for which you have no supporting documents and you have claimed refund of your TDS wholly or partly, you may soon land up in trouble and pay heavy price for claiming such refunds by paying penalty of 200%," said a spokesman, in a written statement.

He said Income Tax Department is keeping a strict vigil on tax payers, especially the salaried class employees of various government departments, paramilitary forces, armed forces etc. who have fraudulently claimed bogus deductions and exemptions in their ITRs for the past few years.

"Once this scam of claiming bogus deductions by the taxpayers was detected last year, the Income Tax Department of J&K approached in a very lenient way considering the lack of tax awareness among the public and organized numerous outreach programmes & tax awareness campaigns to sensitize the public to refrain from making bogus claims while filing their ITRs along with educating them about the consequences of indulging in this malpractice," he said.

Various remedial measures to rectify the mistakes made by claiming fake and ineligible deductions by the tax payers were also suggested to avoid unpleasant communication from the department.

However, it has come to the notice of the department that many salaried employees are still showing cavalier attitude towards filing of income tax returns (ITRs), complete with fake rent receipts, ineligible claims against home loans, false donations and a slew of dodgy practices encouraged by some of the tax practitioners with a promise to slash tax outgo and prop up refund.

"This paper has information that based on complete data available with the department for F.Y. 2019-20, 2020-21 & 2022-23 regarding these bogus claim makers, Income Tax Department, J&K has issued notices under section 133(6) of the Income Tax Act to erring employees," said the spokesman.

"Now the deptt is prepared to issue to the almost 15,000 taxpayers all across J&K seeking relevant documentary evidences to verify the authenticity of deduction claims made by them.

"If found culprit of claiming non genuine deductions, the taxpayer apart from paying due taxes calculated on misreported income will also be subject to a penalty of 200% on tax payable.

"Furthermore, the department is also empowered to launch prosecution against repeated tax offenders for which imprisonment could be for a period of 3 months and may extend up to 7 years. Non-compliance to the notices under section 133(6) is also not a resort as the same will attract penalty of Rs. 10,000/- under section 272A for each non-compliance."

The Principal Commissioner of Income Tax, J&K and Ladakh has urged all salaried employees to check their Income Tax Returns for Assessment Years 2021-22. 22-23 & 23-24 filed by themselves or by any tax practitioner/other person.

If there is any claim of deduction under section 10(13A) 80C. 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GGC and 80U in their ITR, they should cross check if relevant documents/certificates are in their possession. Once the notice under section 133(6) is issued the assessee has to furnish such evidence/documents within 8-10 days, failing which penalty for non-compliance will be levied and the case will be selected for scrutiny later and in case any deduction is found as wrong, penalty of 200% of the tax evaded will be levied in such cases.

In the past also, the Income Tax Department, J&K had selected large number of cases of A.Y.2017-18 & 2019-20 under scrutiny and besides raising huge demands in cases of wrong deductions, also levied penalty under section 271(1)(c) equal to the tax. The department has also attached salary accounts of such persons in past three months for recovery of tax and penalty and now planning to launch prosecution in all cases.

"There is still some time left for the taxpayers to avoid these punitive actions from I.T. department by revising and updating their ITRs. The deadline for revising ITRs filed for F.Y. 2022-23 is 31st December 2023. Similarly, department has also provided facility of filing Updated ITR (ITR- U) for F.Y. 2020-21 & 2021-22 by 31st March, 2024 by paying additional tax of 50% & 25% respectively in addition to additional tax liability for those who have claimed bogus deductions during these years.

A senior officer, however cautioned that taxpayers should revise/update their ITRs without further loss of time to avoid selection of their cases under scrutiny. If the Income Tax Return is revised/updated after issue of notice by the Department, penalty will still be leviable in such cases because that revision/updating will not be treated as voluntary. He has revealed that in March 2023, more than 10000 government employees of J&K from education, health, police, revenue and other departments of UT had filed ITR-U for A.Y.2020-21 on the advice of their Heads of Departments who had issued written advisory also.

Similarly large number of CRPF personnel and other paramilitary/forces had updated their ITRs and avoided selection of their cases under scrutiny.



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