I-T Department to revamp system for refund claims

In a bid to prevent recurrence of such frauds the CBDT has decided to replace the existing electronic system of handling high value refund claims with a “more robust and foolproof system,” a spokesperson of the CBDT said. 

The CBDT has directed a complete revamp of the security system in the software of the Income Tax Department dealing with electronic processing and disbursement of refund claims, the spokesperson said.

Income Tax offices across the country have been advised not to process refund claims through electronic clearing system (ECS) till the foolproof system is in place.
The Income Tax refund fraud came to light recently when an Income Tax Officer based in Mumbai noticed some time around January 12 that refunds had been issued from his jurisdiction without his knowledge or approval of his higher authorities. The officer immediately brought the matter to the notice of his superior officers.

On internal inquiry by the department, it was found that user IDs and Passwords of certain officers had been fraudulently used to generate refunds in some cases.
The investigating officers of the Mumbai Income Tax Department have already identified the bank accounts, beneficiaries and some of the scamsters involved in the fraud, the CBDT spokesperson said.

The department has also alerted the Mumbai police and the CBI about the fraud.