I-T dept takes steps to prevent refund claims based on bogus investments

CBDT Chairman Sushil Chandra

The Income Tax department has introduced additional checks to prevent outgo towards bogus refund claims based on fraudulent investments shown in tax return forms, CBDT Chairman Sushil Chandra said Wednesday.

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.

Regretting that people are claiming bogus refunds, Chandra said it was 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 tax payers 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 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.

Referring to issues concerning "high-pitched" assessment, Chandra said that CBDT 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.


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