3 I-T employees siphoned off crores via fictitious TDS refunds; CBI probes

The CBI has started an investigation against three Income Tax department officials for allegedly facilitating fictitious refunds of TDS deducted for several assessee by misusing system access of senior officers, officials said on Sunday.

The probe agency filed the FIR based on a complaint from Joint Commissioner of Income Tax, Muzaffarnagar against three group C officials of the Income Tax department who allegedly managed to dupe the department by allegedly misusing RSA tokens of assessing officers to work out and generate fictitious refunds of Tax Deducted at Source (TDS).

RSA tokens are unique and time-synchronous solutions that automatically change a user's password every 60 seconds.

Following the FIR, the agency had carried out searches at multiple locations, they said.

The Central Bureau of Investigation (CBI) has named three I-T officials -- Abhay Kant, Saurabh Singh and Rohit Kumar -- in connection with the case along with nine beneficiaries of the refunds.

The tax department has alleged that the officials misused the RSA tokens of assessing officers to work out and authenticate generation of fictitious refunds payable to 11 assessee, on the system, and got the refunds worth over Rs 1.39 crore between August 1, 2020 and August 25, 2021 till the fraud was detected.

The scam surfaced when one of the assessing officers detected computation of refunds under section 154 of the I-T Act for assessees who did not belong to his range, they said.

Orders under the section are passed when any rectification to any order or processing is required either on the application of the assessee or by the assessing officer on its own when some mistake is to be corrected, which is apparent in records, it alleged.

These refunds were reported to be on AST (Assessment Information System), an old system, and not on ITBA (lncome Tax business application) on which the process has now been shifted since 2016.

"Out of the total amount siphoned off, nearly Rs 35 lakh was deposited back to government accounts by the accused officials as taxes against demand Rs 22 lakh was recovered by assessing officers by way of coercive actions against the beneficiaries," it alleged.

"A total recovery either by the staff involved in the scam or by the assessing officers by way of attachment of accounts of the assessees comes to Rs 57.31 lakh so far. The total amount still outstanding, including interest chargeable, is computed at

Rs 94.39 lakh," the complaint alleged.