DIRECTORATE OF INCOME TAX (SYSTEM)
ARA Center, Ground Floor, E-2, Jhandewalan Extension,
New Delhi –110055
F.No. System/ITBA/Instruction/ITR Processing/177/16-17/
All Principal Chief Commissioners of Income-tax/CCsIT
All Principal Director Generals of Income Tax /DGsIT
All Principal Commissioners of Income-tax/CsIT/CsIT(Admin & TPS) /CIT (TDS)
All Principal Directors of Income Tax/DsIT
Subject: -SOP for dealing with ITR Processing or Assessment in suspected Fraud cases- Reg.
This is in reference to the subject mentioned above.
2. The suspected fraud cases are being reported to CPC-ITR, Bengaluru by CPC-TDS and various field formations. Such suspected cases are broadly classified in two categories i.e (i) Suspected Fraud PANs (ii) PANs linked with the suspected fraud TANs. The first category broadly consists of cases where a PAN (Taxpayer) has been identified as having submitted a false claim of deduction or exemption with collusion of some intermediary or otherwise or having submitted revised return by identity theft or impersonation for the primary purpose of claiming refund or fraudulently obtained PAN for the purpose of committing refund fraud, whereas the second category consist of the PANs linked with a TAN where suspected TDS fraud is committed with false claim of TDS deduction with the purpose of claiming refund.
3. It may be noted that in many cases the reporting of the fraudulent cases is based on preliminary findings or survey action. Therefore, the processing of the ITR is put on hold but not invalidated or treated as non-est.
4. Whenever any such case is reported, CPC-ITR sends an e-mail to designation based e mail id of Assessing Officer concerned with request to verify the facts and submit a report to CPC-ITR. If assessing officer’s report indicate that there is no fraud in the case, the CPC-ITR remove the case from list and allow processing and other proceedings on the PAN as per normal business rules. If report of AO confirms the fraud or no report is received from AO within 30 days, the CPC-ITR processes the case as per following-
(i) Suspected Fraud PAN- The credit of TDS and taxes is not allowed in processing.
(ii) PANs Linked with suspected Fraud TAN- The credit of TDS linked with suspected TAN is not allowed in processing.
5. Instances have been reported by field formations that CPC-ITR is not allowing computation in such cases selected under scrutiny. Manual order upload in ITBA is also not being allowed in such cases. In many cases the Assessing Officer is unaware that the PAN or TAN quoted by Taxpayer is categorized as fraudulent.
6. To deal with such type of cases and to safeguard interest of revenue, the following SOP is being prescribed.
The assessing officer will be provided a list of such suspected cases through ITBA- Assessment Module-MIS.
i. The AO will verify the facts and submit a report to CIT(CPC-ITR), Bengaluru through Pr CIT concerned indicating recommendation (i) No fraud relating to TDS or other taxes committed in the case so to remove the case from the list of suspected fraud cases (ii) Any other fact necessitating keeping the case in suspected fraud list. The report may be submitted in the attached proforma, Annx-1
ii. On receiving favorable report, CPC-ITR will remove the case from such list and allow credit of TDS/Pre-paid taxes as the case may be. Therefore, the onus will be on the AO to ensure full satisfaction about the genuineness of the taxpayer or his claims in ITR or of TDS/Tax payments
iii.Such report alongwith Approval of Pr CIT concerned may be sent to CPC-ITR through e-mail at aohelpdeskc firstname.lastname@example.org
iv. On receiving adverse report or no report, CPC-ITR will process/compute such case as per existing process described in para 4. The AO are also advised to disallow such fraudulent claims of taxes while submitting computation in such cases.
v. SPECIAL NOTE- In any such case is being manually uploaded in ITBA- If adverse report is submitted to CPC-ITR or no report is submitted for the PAN, , the assessing officer should disallow the credit of TDS on PAN linked to suspected TAN or credit of entire prepaid taxes made on suspected PAN failing which the case will not be allowed to be uploaded on ITBA.
7. The complete procedure is elaborated in the user manual for the functionality which is available on ITBA for the convenience of the users. This may be circulated amongst all officers working in your charge. With this, the various representations received from field formations in this regard stand disposed off. Since many such cases are reported to be Time-barring (Dec31st), AOs may take necessary action as per this Instruction at the earliest to avoid any last minute problem.
8. In case of any technical difficulty being observed, users may immediately contact OR write to following-
A. URL of helpdesk of ITBA : http ://incometax.net
B. Helpdesk number – 0120-2811200
C. Email id : itba.helpdesk @incometax.gov.in
(B) Helpline Number-+91-80-25186965/ +91-80-25186922
9. It is further emphasized that all such cases should be examined on priority and reference as per prescribed procedure be sent to CPC-ITR as soon as possible. It is expected that all Officers may henceforth use the aforesaid process, wherever required, while facing such issue.
10. This is issued with the prior approval of Pr. DGIT(Systems).
Add l.DG(Systems)-3, New Delhi
The Commissioner of Income Tax (CPC-ITR)
(Though Pr Commissioner of Income Tax/ CIT (TDS)—)#
Subject- Report in the case of <Name>-<PAN>-Suspected Fraud PAN/TAN list-Reg
Kindly refer to above.
2. The above mentioned case(s) is mentioned in the list of*- (i) Suspected Fraud PANs (ii) PANs linked with the suspected fraud TANs- is assessed in this charge:
3. The enquiry has been conducted and it is found that* –
(i) Enquiry is complete and no fraud relating to TDS/Other tax payment is committed in this case. The case may be treated as closed and removed from Fraudulent PAN/TAN list and Processing or Assessment or Rectification may be permitted as per claimed TDS/Tax Payment.
(ii) Enquiry is complete and fraudulent activities w.r.t claiming undue credit of taxes is committed in this case (for PAN) or filing fraudulent TDS statement (for TAN). Subject to below- Processing or Assessment or Rectification may be permitted, after such disallowance of claim. All TDS/Other tax claims are disallowed as per list below:
(iii) Enquiry was conducted and it was found that though wrong claim has been made in respect of exemption/deductions but payment of TDS and prepaid taxes are in order. I am disallowing such wrong claims hence credit of TDS and prepaid taxes may be allowed in computation.
(iv)Enquiry is under progress- Till then credit of all prepaid taxes /TDS claimed by suspected PAN in the ITR or w.r.t TAN is disallowed. Hence Processing or Assessment or Rectification may be permitted, after such disallowance of claim.
(v) No proceeding is pending with me, so credit of taxes in the proceedings pending with CPC-ITR may be dealt as per CPC-ITR rules in these types of cases.
4. Any other facts-(Describe briefly)
(Name of AO or AO- TDS)
*strike out or delete whichever is not applicable
U No report will be considered without approval of PrCIT or CIT TDS