Rs 13 crore IT refund fraud in Vizag, Rajahmundry unearthed

VISAKHAPATNAM: The income tax department has unearthed ₹13 crores in an IT refund scam in Visakhapatnam and Rajahmundry.

This was for the second time IT officials were investigating a fraud – the first being in  Hyderabad where they uncovered a ₹40 crore scam. In the present case, a ₹9 crore fraud was detected in Visakhapatnam and ₹4 crore in Rajahmundry.

The modus operandi of the fraudsters was that the ‘consultants’ fabricated bogus documents and filed IT returns without proper documentation under HRA, 80D, 80DD and 80G. The 80DD pertained to claims for medical bill reimbursements citing serious ailments and all the erring claimants sought refunds under this section.

“We have shortlisted 10 tax consultants in Andhra Pradesh and questioned one in Visakhapatnam and another in Rajamahendravaram,’’ said an IT official.

He said more than 350 top executives of Pharma companies, the Visakhapatnam Port Authority,  FCI, the state government and the dredging corporation have claimed refunds, as was stated by the consultant under the scanner. This much was found after probing two consultants. Eight more have to be checked, officials said.

Another source said that mid-level tax consultants, through their agents, approached the officials of the top-salary bracket and offered this scheme. In return, they sought a 10 to 15 per cent commission on every claim. Some employees, who were not aware of the consequences, came forward and gave documents to the consultants.

“We have checked four years data of the claimants and found some were first timers and many frequent claimants,’’ the official said and added that criminal cases will be launched against the consultant and the persons who claimed refund.

Tax lawyers said what the IT officials found was just the tip of the iceberg or a signal of a huge refund scam in Andhra Pradesh. The investigations would continue, they said.