I-T cracks down on PSU SECL-linked bogus refunds, fraudulent deductions

 

 

 

In a sweeping follow-up to Chhattisgarh’s high-profile tax refund scandal, the Income Tax Department’s Investigation Wing on Monday launched a major multi-location operations targeting premises and individuals linked to South Eastern Coalfields Limited (SECL), a PSU subsidiary of Coal India, in Katghora block of Korba and Manendragarh-Chirmiri-Bharatpur (MCB) – the two coal-surplus districts of state – signalling a broadening of the department’s crackdown on suspected tax fraud, illicit transactions, and bogus deductions worth several crores. The entire operation is being steered by the Income Tax Department’s Investigation Wing under the direct supervision of Principal Director (Chhattisgarh) Ravi Kiran, IRS (1996 batch), and Additional Director Bharat Shegaonkar, IRS (2013-batch).

 

Acting on prior intelligence inputs, the department initiated survey operations under Section 132 of the Income Tax Act, covering three strategic premises. Central Board of Direct Taxes (CBDT) investigations have uncovered organised rackets operated by tax intermediaries and certain ITR preparers, who have been filing fictitious deductions and exemptions to inflate refunds. The fraudulent filings include false claims under sections 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDB, with no valid justifications. Employees of PSUs, MNCs, government bodies, academic institutions, and private entrepreneurs are among those found implicated. Many taxpayers were lured into these fraudulent refund schemes with promises of inflated returns for commissions. Approximately 40,000 taxpayers across India have already corrected their returns, voluntarily withdrawing false claims amounting to Rs 1,045 crore in the last four months.

 

The current crackdown has deep historical roots. The probe initially began in 2015 after Raipur’s Income Tax Department received an alert from CBDT flagging a sudden and suspicious surge in refund claims filed by PSU employees. That early warning set off a series of investigations into refund manipulations, many of which were linked to SECL and other state-run enterprises. Sources in the I-T Department confirmed that survey teams visited the residence of SECL’s Open Cast Project Manager Ravishankar Chakradhari while another team reached the house of chartered accountant Manish Gupta. At least three vehicles carrying I-T officials were seen stationed at these premises, with officers meticulously scanning financial ecords, digital data, and property documents. The latest action comes on the back of prior disclosures involving Rs 95 crore bogus refund racket unearthed earlier this year in February, in which around 10,000 SECL employees across Manendragarh, Chirimiri, and Baikunthpur were found to have inflated deductions to claim fraudulent tax refunds. Tax consultants reportedly orchestrated the filings, earning commissions while defrauding the exchequer.

 

That investigation led to the reopening of past assessments for 2020-21 and 2021-22, with thousands of notices issued and recovery proceedings initiated. Highly-placed sources in the Investigation Wing, speaking to The Hitavada on condition of anonymity, disclosed that Monday’s multi-location survey operations are part of a deeper probe into suspected fresh attempts to manipulate tax filings. “The focus is not only on fraudulent refunds but also on fictitious deductions being claimed repeatedly through intermediaries. The transactions under scrutiny indicate a sophisticated nexus between public sector employees and tax facilitators,” a senior tax official revealed. This modus operandi is not new to Chhattisgarh. In 2017, the I-T Department had cracked a similar scam involving nearly 3,000 employees from SECL, Bhilai Steel Plant (BSP), and Bharat Aluminium Company Ltd (BALCO), where refunds were systematically inflated using fictitious deductions.

 

That probe led to arrests, prosecutions, and recovery actions, exposing vulnerabilities in the refund system that trusts self-declared filings below Rs 1 lakh. The CBDT official sources further disclosed that these fraudulent claims were frequently facilitated through temporary email IDs created by tax preparers to file bulk returns, many of which remained unread when official notices were later issued. Despite the department’s transition to e-enabled tax administration, communication gaps have emerged as a persistent challenge in curbing this abuse. To detect suspicious refund patterns, the department has leveraged advanced financial data analytics, third-party information sources, ground-level intelligence, and AI-driven detection tools. These methods have been instrumental in identifying large-scale misuse of tax benefits not just in Chhattisgarh but across other states as well.