Refund Fraud scamsters Identified. Swift action by the Income tax Department to put in place a robust method of issuing refunds

No.402/92/2006-MC (05 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi dated 25th January 2010
On or about 12th January 2010, an officer in the Income Tax
department, Mumbai, noticed that refunds had been issued from his
jurisdiction without his knowledge or approval of his higher authorities. He
immediately brought the matter to the notice of his superior officers.
2. 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.
3. 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.
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