02-06-2023 : The Income Tax Department has found a big scam involving refund claims of Rs 16.64 crore. The scam involves the use of fake and dormant Tax Deduction Account Numbers (TANs) and Accounts Office Identification Numbers (AINs) belonging to several government departments. The department acted quickly, filing two separate First Information Reports (FIR) with the Crime Branch Srinagar against a chartered accountant and 404 other people.
The investigation began in the office of the Joint Commissioner of Income Tax in Manachira Kozhikode, Kerala, where detailed inquiries were made regarding fraudulent refund claims using manipulated AINs and fraudulent creation of TANs by unscrupulous individuals. Information related to Jammu and Kashmir was subsequently shared with the Commissioner of Income Tax (TDS) in Chandigarh in January of the previous year.
After that, the Srinagar Income Tax Officer (TDS) conducted a thorough inquiry and obtained statements from numerous people in accordance with Section 131 of the Income Tax Act, 1961. Imran Dara, a chartered accountant, was the primary perpetrator of the scam in Jammu and Kashmir, according to the inquiry. Dara uploaded phoney payment amounts and TDS on several TANs using three fake AINs and one dormant AIN from four different government departments. After that, he credited 1208 PANs (Permanent Account Numbers) of people he knew. Out of these, 404 PAN holders had submitted Income Tax forms and received TDS refunds that were deposited in their bank accounts and then withdrawn.
Further investigation uncovered that Imran Dara used four AINs and nine TANs to carry out the scam. The AINs belonged to the Sub-Divisional Magistrate Office in Dawar and Gurez Bandipora, the Principal Government Higher Secondary School in Kupwara, the Executive Engineer in Sumbal, and the Executive Engineer in R&B, Right River Circular Road in Srinagar. The TANs used in the scam were allotted to various individuals and entities associated with schools, government offices, and departments.
It was discovered that most of the TAN holders were school teachers who had not filed any TDS returns, although TDS on their salaries had been deducted. The concerned Drawing and Disbursing Officers (DDOs) were unaware that their TANs were being used for bogus refund claims through false returns filed in their names.
The investigation revealed that the fraudulent TDS returns filed through the AIN of the Sub-Divisional Magistrate office in 2016-17 were linked to the TAN of M/s ICDS and Co (Proprietary concern). Ultimately, the refunded amount of Rs 5,00000 was credited to Imran Amir Dara’s PAN, who is both the proprietor of M/s ICDS and Co and a direct beneficiary of the fraud scheme.
The fraudsters manipulated the applicable tax deduction rates in the bogus TDS returns, using higher rates such as 10% and 20% instead of the correct rate of 2% under Section 194C. This allowed them to maximize the refunds they received.
The estimated amount involved in the bogus refund scheme is around Rs 88 crore over a span of four years, from 2018-19 to 2021-22. During the investigation, a total of 1208 PANs were identified for use in carrying out the bogus refunds. However, out of these PANs, only 410 individuals filed Income Tax returns, and refunds totaling Rs 16.64 crore were issued in 404 cases for Assessment Year 2018-19 and 2020-21.
It is clear from the findings that CA Imran Amin Dara and the 404 PAN holders are the ultimate beneficiaries of the scam, as they have received the refunded amounts.
Following the instructions of M P Singh, the Principal Commissioner of Income Tax in Srinagar, Akash Kumar Meena, Income Tax Officer (Technical), filed the FIRs with the Crime Branch of the Jammu & Kashmir Police. Under the direction of the Special Director General of Police (Crime), a Special Investigation Team (SIT) has been put in place to carry out additional investigations into the matter.