The Central Board of Direct Taxes (CBDT) said on Monday that all high-value refunds issued during the current fiscal will be cross-verified. Also, the system of handling high-value refunds will be replaced with a more robust and foolproof system.
These decisions come in the wake of recent income-tax refund fraud in the Mumbai jurisdiction. An officer in the Income-Tax Department, Mumbai, noticed on or about January 12 that refunds had been issued from his jurisdiction without his knowledge or approval of his higher authorities. The officer immediately brought the matter to the notice of his superior officers.
On an internal inquiry by the Income-Tax Department, it was found that user Ids and passwords of certain officers had been fraudulently used to generate refunds in some cases.
An official release said that a slew of actions were taken by the Department to contain the damage. The CBDT said that stop payment orders were issued. As a result, refund outgo in at least two cases could be prevented.
Investigation and search action was undertaken by the Directorate of Income Tax (Investigation), Mumbai, to detect the bank accounts to which the refunds had been credited and the beneficiaries. IT investigators have identified the bank accounts , beneficiaries and some of the scamsters involved. Also Mumbai police and Central Bureau of Investigation have been informed.
A high-value refund generally refers to one involving an amount of over Rs 1 lakh, according to CBDT spokesman here.