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Read more about Refund fraud: Employees of 50 prominent Bengaluru companies under I-T net on Business Standard. The firms include Infosys, IBM, Vodafone and Biocon; employees accused of forming a nexus with chartered accountants

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refund fraud employees of 50 prominent bengaluru

Refund fraud: Employees of 50 prominent

Bengaluru companies under I-T net

The Income-Tax Department on Thursday claimed to have busted a racket of

extracting fraudulent tax refunds by employees of bellwether companies like IBM,

Vodafone and Infosys in alleged connivance with a Chartered Accountant (CA) in

Bengaluru, the IT capital of the country.

The investigation wing of the department conducted searches on the premises of

an unidentified CA yesterday and claimed to have "seized" bogus claim

documents of his various clients along with WhatsApp chat messages.

The CA, a department statement said, was "found to be instrumental in filing false

income tax returns and making fraudulent refund claims" by citing inflated or

false claims of loss from house property.

The department claimed that the CA filed "nearly 1,000 returns with loss from

house property, aggregating to loss claim of Rs 18 crore" till now.

employees of over 50 prominent and medium sized

Employees of over 50 prominent and medium-sized companies in Bengaluru are

under the scanner of the department who were the clients of this CA, whom the

department did not identify citing ongoing investigation.

"It is noted that employees from some of the reputed companies such as IBM,

Vodafone, Saplabs, Biocon, Infosys, ICICI Bank, CISCO, Thomson Reuters India

Limited among others have also resorted to such fraudulent claim of refunds by

filing revised returns of their individual income," the department said.

It added that many of them have been questioned by the taxman in their

respective offices since yesterday.

"This is a case that is building up. Such a large-scale action in cases of employees

seeking false refunds has been undertaken by the tax department for the first

time," a senior official said.

The department said many of the employees it questioned, after the fraud was

unearthed, said they do not have any "real loss" under the 'income from house

property' category and the employees shifted blame on the CA saying it was the

professional who said "he can get refunds for them by making some claims".

"They also deposed that, out of the refund received, the auditor (CA) had charged

10 per cent as incidental charges.

Some WhatsApp messages with auditor were also shown by them, as supporting

evidence," it said.

The CA, instead, told the taxman that he filed those bogus claim refunds at the

"insistence of his clients".

"Further enquiries like examination of his (CA's) other clients and cross

examination of them with the CA are being conducted.

"Necessary action as per law will be taken against the CA as well as the persons

who have claimed wrong refunds under the provisions of Income Tax Act," it said.

The department cautioned taxpayers from indulging or getting influenced by such

frauds as it said that making claim of refunds by the taxpayer from the

department is based on "trust" between the two sides and this should not be

breached.

"The Income Tax department now does automated and faceless return processing

and issue of refunds. This is based on the principle of trusting the taxpayer.

making a bogus and fraudulent claim is not only

"Making a bogus and fraudulent claim is not only a betrayal of this trust, it will

expose the taxpayer to heavy interest, penalty and possible prosecution ending in

a jail term," it said.

All taxpayers, the statement said, are requested to be highly alert to fraudulent

schemes like the present one.

"Such fraudulent schemes will invariably be caught out and will result in penal

action on the taxpayer.

"If any person has made a false claim in the I-T returns resulting in lower tax

payment/unjustified refund, they are advised to take immediate steps to file

revised returns disclosing the correct income and paying due tax," it said.

Article By - Business Standard