TDS Refund Fraud of over Rs 1.39 crore Detected by CBI

According to sources, the Central Bureau of Investigation (CBI) has started a probe into three income tax department employees for allegedly facilitating false TDS refunds for a number of assessees by abusing senior officers’ access to the system.

The investigation agency filed the FIR in response to a complaint from the Joint Commissioner of Income Tax, Muzaffarnagar, against three group C Income Tax officials who were accused of defrauding the agency by allegedly using RSA tokens of assessing officers to calculate and produce fictitious refunds of Tax Deducted at Source (TDS).

Abhay Kant, Saurabh Singh, and Rohit Kumar have been identified as the accused officials. They were assigned to Muzaffarnagar, in Uttar Pradesh. Between August 1, 2020, and August 25, 2021, they fraudulently generated TDS refunds of Rs.1.39 crore using the Assessing Officers’ RSA authentication tokens. This involved 11 assessees. Instead of using the Income-Tax Business Application, the relevant data was supplied into the previous Assessment Information System.

A user’s password is automatically changed every 60 seconds with RSA tokens, which are distinct and time-synchronous solutions.

According to them, the agency had conducted numerous searches after receiving the FIR.

According to them, the scheme came to light when one of the assessing officials noticed computations of refunds under section 154 of the I-T Act for assessees outside of his range.

Orders under this section are issued when changes to orders or processes are necessary, either at the assessee’s request or at the assessing officer’s initiative when a mistake needs to be addressed and is obvious in records, it was claimed.

Out of the total, the accused officials took roughly 35 lakh as taxes in opposition to the demands made by the Department and deposited it back into the government account. The Assessing Officers used coercion against benefited assessees to recover an additional amount totaling over 22.38 lakh. More than 94.39 lakh rupees were owed as a result of the alleged fraud.