CBDT to cross-verify all high value refunds this fiscal - BANK ACCOUNTS, BENEFICIARIES AND SOME SCAMSTERS INVOLVED IN IT REFUND FRAUD IN MUMBAI IDENTIFIED

The Central Board of Direct Taxes (CBDT) has stated that an officer in the Income Tax department, Mumbai noticed on or about 12th January, 2010 that refunds had been issued from his jurisdiction without his knowledge or approval of his higher authorities. The officer immediately brought the matter to the notice of his superior officers.

On internal inquiry by the Income Tax department, it was found that User Ids and Passwords of certain officers had been fraudulently used to generate refunds in some cases. Upon detection of the fraud, the following actions were taken by the Income Tax department to contain the damage:-

(i) Stop payment orders were issued. As a result, refund outgo in at least two cases could be prevented.

(ii) Investigation and search action was undertaken by the Directorate of Income Tax (Investigation), Mumbai to detect the bank accounts to which the refunds had been credited and the beneficiaries.

(iii) I-T investigators have identified the bank accounts, beneficiaries and some of the scamsters involved.

(iv) Mumbai police and CBI Mumbai have been informed.

Further actions being taken to prevent the recurrence of such frauds are as follows:-

a) All high value refunds issued during the current financial year will be cross-verified.

b) The system of handling high value refunds will be replaced with a more robust and foolproof system.

BSC/BY/GN-12/10