200 Crore Tax Refund Scam Busted by IT Department; Over 2000 Returns Manipulated, Fake 80G Deductions
Reported by Amit Singh
Mumbai/Gondia, 04th July 2025: The Investigation Wing of the Income Tax Department has uncovered a large-scale tax refund scam involving fraudulent claims worth approximately ₹200 crore. A raid conducted on a Gondia-based Income Tax Practitioner (ITP) revealed manipulation in over 2000 Income Tax Returns (ITRs) and 70 TDS returns.
According to official sources, the ITP allegedly facilitated widespread tax evasion by inserting fictitious figures under the ‘Any Other’ column of Exemptions in ITRs and misusing sections of the Income Tax Act that are not applicable to Indian taxpayers. The ITP reportedly charged a 10% commission on the refund amounts generated through such practices.
Further investigations revealed that the ITP was working in collaboration with a donation-receiving Trust and its Trustees to provide bogus deductions under Section 80G. Taxpayers were issued fake donation receipts, and a 2% commission was charged on the donation amount. The illicit income earned through these deductions was routed through Fixed Deposits (FDs), investigators said.
The investigation also exposed manipulation of TDS returns of several Zilla Parishad schools. In at least 70 cases, the ITP substituted the PAN numbers of actual school employees with his own PAN while keeping the names of the employees intact. This led to the diversion of TDS credits to the ITP’s account, which were later claimed as refunds in his personal tax filings. The total refund claimed through this method alone is pegged at ₹36 lakh.
Preliminary findings estimate that more than 2000 income tax returns and 70 TDS returns have been fraudulently manipulated, resulting in tax evasion running into crores of rupees. The investigation by the Income Tax Department is ongoing.
