This year, claiming a full income tax (I-T) refund could take longer than you expect if the amount mentioned in your return does not match that in the department’s system. Bitten by a Rs 14-crore refund scam in December last year, I-T authorities have ordered that an assessee can only get the refund amount shown in the department’s computer system, and that if the assessee claims more than that, he or she can only get it after filing for rectification and submitting the relevant documents.
The scam, uncovered in January, involved a chartered accountant and his accomplices siphoning off funds using the department’s Electronic Clearing System — they gained access to the system by stealing the password of an assessing officer.
The accused filed returns online in the name of relatively much poorer individuals by showing them as high earners. They processed the returns online by using the assessing officer’s password and claimed large sums as refunds, after showing that they had paid excess tax.
A senior I-T official said the scam grew out of the fact that officials, at the time, had the power to clear a refund mentioned in the assessee’s return without scrutiny even if it didn’t match the amount in the department’s system.
“The accused misused this and used the assessing officer’s password to clear the refund,” the official said.
After the scam broke, the department initially said it would only release the refund amount shown in the department’s system, even if it were less than the assessee’s claim.
“We were not allowed to manually rectify the amount in case of a difference,” the official said.
“However, we realised many assessees would lose a part of their legitimate refund if the department made a mistake in calculating it,” the official said.
Now, the department has decided to return the difference after making a manual rectification.
“But for this, the assessee will have to file for rectification and claim the differential amount,” the official said.
For this, the assessee needs to submit the relevant documents — this will delay the refund by two months.
Officials said while the new instructions will make the system foolproof, and better protect the department from another scam, it will need assessees to be more patient, given the resultant delay in the refund process.