Srinagar, Mar 18: In a strict move against the rampant misuse of tax deductions leading to bogus refunds, primarily among salaried employees in various Central and State government departments, including police and armed forces, the Income Tax Department has initiated stern action against defaulters, issuing prosecution notices and attaching salary accounts of numerous employees.
Taxpayers were found exploiting annexure-less filing of Income Tax Returns (ITRs), claiming excessive deductions under various sections without legitimate eligibility.
According to department officials, this fraudulent activity resulted in the refunds of Tax Deducted at Source (TDS) by their Accounts Officers or Drawing and Disbursing Officers (DDOs), either substantially or fully. In some cases, taxpayers claimed deductions exceeding 80 per cent of their Gross Total Income, a scenario deemed highly improbable.
To address this significant issue, advisories were issued from the offices of prominent authorities including the Chief Secretary (J&K), Director General of J&K Police, MD of J&K Bank, and Vice Chancellors of universities, urging employees to rectify their ITRs. Officials emphasized that failure to comply with departmental communications could lead to penalties, interest, and even prosecution under the Income Tax Act.
Speaking on the matter, a department spokesperson stated, “We expected taxpayers to acknowledge their mistakes and rectify them by filing revised/updated ITRs to avoid harsh consequences.” Indeed, many employees revised or updated their ITRs within stipulated time limits, thereby avoiding scrutiny and penalties.
However, those who failed to revise their ITRs received notices from the department, leading to the selection of their cases for scrutiny for assessment years 2021-22, 2022-23, and 2023-24. Such non-compliance could result in levying taxes, penalties up to 200 per cent, and interest on their incomes.
Furthermore, the department issued notices under section 133(6) of the Act to more than 3000 erring taxpayers, seeking documentary evidence for claimed deductions. Show cause notices for launching prosecution under section 276C and 277 of the I.T Act were also issued in more than 700 cases where taxpayers failed to furnish credible justification.
Quoting the spokesperson, “Non-compliance to department’s communication will lead to a penalty of Rs. 10,000/- for each default.” Moreover, the department is equipped to recover wrongly claimed amounts by attaching defaulters’ bank accounts.
Taxpayers are advised to file updated ITRs immediately to rectify fraudulent claims and refrain from such practices in the future. For assistance, taxpayers can contact AaykarSevaKendras in local Income Tax Department offices or registered Chartered Accountants/Tax Practitioners, or visit www.incometax.gov.in.
The deadline to file updated ITRs for F.Y. 2020-21 and 2021-22 is March 31, 2024 and March 31, 2025, respectively. Delays in compliance may result in additional penalties and scrutiny.
