The Income Tax (I-T) Department on Monday launched a massive verification drive across 150 locations nationwide, unearthing a widespread network of fraudulent income-tax return (ITR) filings involving unauthorised intermediaries and return preparers.
According to a statement by the Finance Ministry, the operation targets individuals and entities that have facilitated false claims of deductions and exemptions on behalf of clients — many of whom are employees of multinational corporations (MNCs), public sector undertakings (PSUs), government departments, educational institutions, and entrepreneurs.
Fraud Involving Organised Rackets
The I-T Department has discovered that organised rackets were systematically filing fake returns to fraudulently claim income tax refunds. These schemes typically involve false tax deducted at source (TDS) details and exploit beneficial provisions under the Income-tax Act, 1961.
“These returns are being filed without valid justification, often in collusion with intermediaries who lure taxpayers with promises of inflated refunds in exchange for a commission,” the ministry said.
In many cases, preparers created temporary email addresses to file returns in bulk, later abandoning them — resulting in official notices from the department going unread by the taxpayer.
Technology and Intelligence Aid the Crackdown
To detect suspicious patterns, the department used:
- Third-party financial data
- Ground-level intelligence
- Advanced AI tools
These efforts were bolstered by recent search-and-seizure operations in Maharashtra, Tamil Nadu, Delhi, Gujarat, Punjab, and Madhya Pradesh, which revealed substantial digital and physical evidence of fraudulent practices.
Stern Action Ahead
The I-T Department warned of strict punitive action for continued non-compliance, including penalties and prosecution wherever applicable.
“This verification exercise will help dismantle these networks and ensure legal accountability,” the ministry said.
Voluntary Compliance and Recoveries
Despite the fraudulent activities, the ministry noted a positive trend in voluntary compliance. In the past four months, nearly 40,000 taxpayers updated their returns, voluntarily withdrawing false claims amounting to ₹1,045 crore.
“However, many remain under the influence of these masterminds and continue to evade the law,” the ministry said.
Taxpayers are again strongly advised to report accurate income details and avoid dealing with unauthorised agents or preparers promising undue refunds.