An outreach programme cum interactive session was organized by the Income Tax Department, J&K in collaboration with District Administration, Doda at the DC Office. This session was a part of series of outreach programmes titled “Mulaqat 2.0” being conducted by the department all across the state to raise tax awareness among the public and to caution them of the repercussions of making wrong claims in their ITRs. The event was chaired by Sh. M.P Singh, Pr. Commissioner of Income Tax, J&K and Ladakh alongwith other officers of the Income Tax Department including Sh. Rahul Padha (Joint Commissioner of Income Tax, Srinagar), Sh. M.L Dogra (Income Tax Officer, Udhampur), Sh. Karamvir (Income Tax Officer, TDS Jammu & Srinagar) & Sh. Ankit Dhaka (Tax Recovery Officer, Srinagar). Around 250 DDOs & employees of various Government departments alongwith people from local trade associations & business fraternity attended the interactive session.
Sh. M.P Singh commenced the session by welcoming the attendees and highlighting the importance of taxes in nation building and infrastructural development alongwith significance of paying taxes honestly. Subsequently, Sh. Rahul Padha took the stage and apprised the audience that last year Income Tax Department detected a bogus refund scam of large magnitude wherein it was noticed that a significant number of Govt. employees of almost all State departments/Police/ Paramilitary forces etc. were found indulged in claiming bogus deductions in the ITRs to get the most of TDS back as refunds. The malafide practice has led to the leakage of hard earned revenue of the department. Mr. Padha further highlighted that many taxpayers are also lured by various touts/ unauthorized agents and tax practitioners who by charging 20-30% commission file their ITRs and claim bogus deductions and exemptions to get money deducted as tax back. He further emphasized that the Department is in possession of complete data of such touts as well as the salaried taxpayers who have been claiming fake deductions and the culprits won’t be sparedOn this issue of bogus deduction and refund, Sh. M.L Dogra, ITO, Udhampur further highlighted that the majority of claims of these bogus deductions in J&K have been detected in Doda, Kishtwar & Bhaderwah. These fraudulent deductions were claimed under various section of Income Tax Act such as 10(13A)(House Rent Allowance), 80C (contribution in LIC/PF/ tuition fees etc.), 80CCD, 80D (Health Insurance), 80DD(Treatment of disability), 80DDB (Medical treatment), 80E (Education loan), 80EE/80EEA (Loan for house property), 80EEB (Deduction for purchase of Electric vehicle), 80G (Donations to Trusts, Charitable Institutions etc.),80GGC (Donation to political parties) and 80U (Deduction in case of disability).
He further warned that the data regarding fraudulent claims has been processed and analyzed by the department and notices under section 133(6) of the I.T Act are being issued to those who have made bogus deduction claims in their ITRs. Once the notice under section 133(6) is issued, the assessee has to furnish such evidence/documents regarding deductions claims made by them within 8-10 days, failing which penalty for non compliance amounting to Rs. 10,000/- for each default will be levied and the case will be selected for scrutiny later and in case any deduction is found as wrong, penalty of 200% of the tax evaded will be levied in such cases. In the past also, the Income Tax Department, J&K had selected large number of cases of A.Y.2017-18 & 2019-20 under scrutiny and besides raising huge demands in cases of wrong deductions, also levied penalty under section 271(1)(c) equal to the tax. Moreover, those who were under impression that they will get relief in case of demands raised by the department against them from Appeal forums were reprimanded and additions in their cases were confirmed as well.
On the issue to tax recovery from the defaulters, Sh. Ankit Dhaka, Tax Recovery Officer, Srinagar apprised the audience that to recover the demands from these taxpayers, the department has also attached salary accounts of in past three months for recovery of tax and penalty and now planning to launch prosecution in all these cases. He emphasized that the smart and the only way to avoid all this hassle, harassment and punitive actions for those who have made these fake deduction claims in their ITRs filed for F.Y. 2022-23 relevant to A.Y. 2023-24 is to revise their ITRs before 30th December, 2023. Similarly, for those who knowingly or unknowing fell in this trap of making bogus deductions and claiming refund in earlier years were also advised to amend their mistake by filing Updated ITRs (ITR-U) for F.Y. 2020-21 & 2021-22 by 31st March, 2024 by paying additional tax of 50% & 25% respectively in addition to their tax liability. Since last year, the department has been regularly organizing special campaigns to sensitize the taxpayers to refrain from making wrong claims in their ITRs and revise/update their ITRs timely in case they had claimed bogus deductions. As a result, more than 10,000 employees accepted their mistakes and corrected their Income Tax Returns by filing ITR-U for F.Y. 2019-20 (Assessment Year 2020-21). Quoting a recent example he said that many officers of Sher-e-Kashmir Police Academy have filed Updated ITR(ITR-U) during the current month after an outreach programme was conducted there by the department By doing so they have not only avoided their cases from being picked up for scrutiny but also avoided paying huge penalties as well as prosecution. For those who need any guidance in revising their ITRs may approach Income Tax Offices within their jurisdiction and all the requisite assistance will be provided.
Furthermore, since DDOs of various Government departments and many representatives of trade associations of Doda district were present during the session, Sh. Karamvir, ITO, TDS made them aware about various provisions of TDS especially section 192 (TDS on Salary),194C (Payments to Contractors), 194H(Commission or Brokerage),194IA (TDS on payment on transfer of certain immovable properties) , 194J (Fees for technical or professional services), 201 (Consequences of failure to deduct or ay taxes), 203(Certificate of tax deducted) etc. DDOs were also advised to be extra cautious and grant only eligible deductions after verifying relevant documents from their employees. They were asked to ensure correct and timely filing of TDS returns, issue of TDS certificate and take follow up action on defaults identified on processing of TDS returns. Further, against a common practice being followed by the DDOs/ Accounts Officers regarding deduction of taxes of employees in the last 1-2 months of the Financial year, they were sensitized to avoid doing the same & timely deduct taxes and deposit the same to the govt. exchequer. Deduction of tax at the fag end of the F.Y. not only adds financial burden on the employees but also increases their own workload. After the session, the queries raised by the participants on various issues TDS related issues were replied at the spot by Sh. Karamvir.
While concluding the session, Sh. M.P Singh urged and cautioned the audience to refrain from making these fraudulent claims and tax their taxes honestly as the department is keeping a strict vigil on such persons and they will have to face the wrath of department in form of hefty penalties and imprisonment as well. He cited an example that in January 2023, CBI has prosecuted 37 Govt. employees in Kerala including Navy officials for claiming bogus deductions in their Income Tax Returns and warned the audience that the same may happen in UT of J&K also, if reference is made by the department. Furthermore, employer department can also initiate disciplinary proceedings against erring employees. Therefore, for the own benefit of employees, he advised that those who have already made this mistake must revise/ update their ITRs immediately without waiting for the deadline. He further stated that for a wrongly claimed refund of Rs. 1 lakh, the taxpayer may have to pay approximately 4 lakhs as tax which includes penalty of Rs 2 lakhs @200% on wrongly claimed amount of Rs. 1 lakh and interest under section 234A/B/C. Apart from this counsel’s fees for representing case before department has also to be borne by taxpayer. Besides, there will be lot of mental harassment & risk of prosecution also. The scrutiny selection may take place tomorrow or up to 3 years from the end of the relevant assessment year. Therefore, the wise thing is to revise your ITRs within time and avoid making these mistakes in future.
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