I-T cracks whip on refund frauds; finds anomalies in mechanism

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An internal probe by the Income Tax department to detect the occurrence of a spate of refund frauds, has found that swindlers have hacked into the user-ids of retired officials and unclaimed 'suspense' refunds were generated to siphon off the taxpayers hard-earned money.

The department cracked the whip after it found that there was a steep increase in the number of refund related frauds and a number of taxpayers and assesses complained to the department as they never got their due money from the I-T.

The CBI also recently arrested two people for defrauding in the refunds generated by the I-T. The department has now issued a slew of directives to its officials who handle refunds, which include launching a new password policy and tagging each refund with a unique code number while it has increased the intervention of senior officials in checking refunds claims.

The department, during its enquiry, found that a number of cases were processed by migrating the Permanent Account Numbers (PANs) of the taxpayer to those Assessment Officers (AOs) and user-ids who were 'not even authorised to process Income Tax returns'.

The department has now asked its technical unit to run a scanner on all those official user-ids, including those of retired officials, which are not in use and kill them.

When an AO processes a refund, he or she logs on to the official system of the I-T to settle the claim and for this an user-id is created for every such officer.