The Income Tax Department has detected a huge scam in refund claims to the tune of ₹3.42 crore in the names/accounts of employees working in government and private organisations, without their knowledge, by a private tax consultant.
Acting on the instructions of the Principal Director of Income Tax (Investigation), the Deputy Director of Income Tax, Madurai, has lodged a complaint with the Central Bureau of Investigation (CBI) against K. Panchatcharam, proprietor of M/s Dhiraviam Tax Services, Ramanathapuram, an approved E-return Intermediary Authority, offering services such as e-filing TDS returns, Income Tax returns, rectification of TDS statements, PAN registration and GST allotment.
The CBI’s Anti-Corruption Branch has registered a case against the service provider, Panchatcharam, prime suspect in the alleged schematic refund fraud, unknown public servants and others on charges of criminal conspiracy and cheating.
The scam came to light in 2018, when Income Tax officials received complaints from two persons – Bose Ponraja and Senthil Kumar – stating that they did not have taxable income, but had received a refund cheque from the Income Tax Department though they did not file any returns.
Further investigations revealed that a large number of e-TDS correction statements were filed by M/s Dhiraviam Tax Services, without the knowledge of the Tax Deduction/Collection Account Number (TAN) holders, and fraudulent claims of refunds were made/received. For this purpose, the PANs of various individuals, who actually do not have business activities or receipts, were utilized without their knowledge. On receipt of funds by such individuals, they were approached by the accused persons for withdrawing funds.
During the course of the enquiry with various government departments/organisations holding the TAN, investigators found that the names of the individuals in whose names the e-TDS returns were filed were actually not employed by them. A verification of e-TDS filed for the financial year 2014-15, 2015-16 and 2017-18 revealed that the names of 246 individuals did not match with PAN records, the Income Tax Department said in its complaint.
In total, a sum of ₹3,42,77,901 was unlawfully claimed for various individuals. Once the refund amount was credited to their respective accounts, the money was withdrawn on the directions of Mr. Panchatcharam who paid a commission ranging between ₹5,000 and ₹10,000.
