The income tax department at Nagpur — which covers both Vidarbha and Marathwada regions — received nearly 6,000 revised returns filed by salaried individuals mainly engaged in the state govt departments, including police force and zilla parishad schools leading to a recovery of as much as Rs 25 crore of tax that was earlier evaded by filing allegedly fake deduction claims.
This was following a survey by the department’s investigation wing on income tax practitioners (ITPs) across Vidarbha and Marathwada regions. It was found that ITPs who provide services in filing tax returns helped individuals save tax by claiming false deductions. Surveys under which the taxmen can scrutinise the books of accounts and returns were initiated in Gondia, Aurangabad, Buldhana, and other parts of the two regions.
In Buldhana, where over 1,500 cops also filed such returns, the department approached the superintendent of police to help in getting the revisions filed. The officer was requested to ensure that the personnel down the line file the revised letter, or else action can be taken against them, said sources.
It was found that the employees claimed fake deductions under heads like payment of home loan interest, provident fund, investment in national savings certificates, or other outgoings towards health insurance payment, provident fund, and even donations to charitable institutions. Expenditure on these counts is deducted from the taxable income under Chapter VI-A of the Income Tax Act.
In some cases, the deductions available to foreign embassy employees were also claimed, said sources. A blatant misuse of the ‘any other option in the forms’ was seen, in which random amounts of deduction under the relevant sections were claimed. A nationwide action has been initiated by the Central Board of Direct Taxes (CBDT) following the findings by the Nagpur office. The ‘any other’ option in the returns form has been changed, and claims under this head have to be backed with supporting documents, a source said. The department is continuing the action and also pursuing the individuals who have not filed the revised returns, said a source.
It all began with a survey on a tax practitioner in Gondia, after which similar cases across the two regions were opened. Individual returns were scrutinised based on the documents filed by the practitioners, said a source. However, the corrective action was effective, leading to the quick recovery of the unpaid tax, said a source.
Taxmen seize Rs 10cr
A total of Rs 10 crore was seized by the income tax department’s investigation wing following a raid on a steel business assessee in Jalna. Taxmen came across fake purchases, huge unsecured loans, and a mismatch in the stock inventory.
Source #TOI
