The Central Board of Direct Taxes (CBDT) was chasing tax evaders so far. Now they have to deal with hackers too as incidents of fraudulent tax refunds were detected involving at least Rs 4 crore from the Income Tax Department, Mumbai with CBDT planning to put in place a more robust and foolproof system for handling high value refunds.
A refund scam hit the IT Department on January 12 when an IT officer in Mumbai found that refunds had been issued from his jurisdiction without his knowledge or approval of higher authorities. The officer immediately brought the matter to the notice of his superiors.
User Ids and passwords of certain officers had been fraudulently used to generate refunds in some cases.
We have deactivated both user Ids and passwords. We are also checking whether this fraud is limited to Mumbai or it is widespread to other IT offices in the country, CBDT spokesperson Sishir Jha told Express when asked about the fraud.
Interestingly, CBDT had introduced the Refund Bankers Scheme of issuing refunds through electronic clearing services three years ago to curb corruption and slash down tedious paperwork To prevent the recurrence of such frauds, CBDT has decided to cross verify all high value refunds issued during the current financial year.
Both the Mumbai police and Central Bureau of Investigation have been informed.
The IT department has asked State Bank of India, which issues refunds through Electronic Clearance System (ECS), to stop making further refunds into suspicious accounts.
But Jha refused to confirm whether it was phishing or hacking and or whether insiders were involved in it. I-T investigators have identified bank accounts, beneficiaries and some of the scamsters involved, he said without giving any other detail.