Return wrongly-claimed IT refunds before Dec 31 to avoid penalty, prosecution: IT Department

Srinagar, Dec 8: The Income Tax Department Friday said that those who have claimed any deduction in their ITR for FY 2022-23 (Assessment Year 2023-24) for which they have no supporting documents and have claimed refund of their TDS wholly or partly, may land up in trouble and pay heavy price for claiming such refunds by paying penalty of 200 percent.

A statement of the Income Tax Department issued here said that the department is keeping a strict vigil on taxpayers, especially the salaried class employees of various government departments, paramilitary forces, armed forces 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 organised numerous outreach programmes and tax awareness campaigns to sensitise the public to refrain from making bogus claims while filing their ITRs along with educating them about the consequences of indulging in this malpractice,” the statement said. “Various remedial measures to rectify the mistakes made by claiming fake and ineligible deductions by the taxpayers 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.”

The IT Department said that it has information that based on complete data available with the department for FY 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.

“Now the department is prepared to issue to the almost 15,000 taxpayers all across J&K seeking relevant documentary evidence to verify the authenticity of deduction claims made by them. If found guilty 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 percent on tax payable,” the statement said. “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 a penalty of Rs. 10,000 under Section 272-A for each non-compliance.”

It said that 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, 2022-23, and 2023-24 filed by themselves or by any tax practitioner and other person.

“If there is any claim of deduction under Section 10(13A), 80 C, 80 CCD, 80 D, 80 DD, 80 DDB, 80 E, 80 EE, 80 EEA, 80 EEB, 80 G, 80 GGC and 80 U in their ITR, they should cross check if relevant documents and certificates are in their possession. Once the notice under section 133(6) is issued the assessee has to furnish such evidence and 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 percent of the tax evaded will be levied in such cases,” the statement said. “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 the past three months for recovery of tax and penalty and now plans to launch prosecution in all cases.”

It said that there is still some time left for the taxpayers to avoid these punitive actions from the IT Department by revising and updating their ITRs.

“The deadline for revising ITRs filed for FY 2022-23 is December 31, 2023. Similarly, the department has also provided facility of filing Updated ITR (ITR-U) for FY 2020-21, 2021-22 by March 31, 2024, by paying additional tax of 50 percent and 25 percent respectively in addition to additional tax liability for those who have claimed bogus deductions during these years,” the statement said.

A senior IT Department officer cautioned that taxpayers should revise and update their ITRs without further loss of time to avoid selection of their cases under scrutiny.

“If the Income Tax return is revised and updated after issue of notice by the Department, penalty will still be leviable in such cases because that revision and updating will not be treated as voluntary,” he said.

The officer has revealed that in March 2023, more than 10,000 government employees of J&K from education, health, Police, revenue and other departments of J&K had filed ITR-U for AY 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 avoides selection of their cases under scrutiny,” he said.


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