NEW DELHI, July 11 � The Income Tax (IT) department has unearthed a large fake donation racket in Manipur which could have resulted in revenue loss to the department to the tune of crores of rupees.
The department, after the racket came to light in the North eastern States, has asked its officials in other parts of the country to keep a strict vigil on tax relief receipts, furnished in lieu of donations made by the taxpayers, a senior IT official said.
It stumbled upon the racket, being run by a non-profit organisation (NPO), after senior IT officials found that the total amount of refunds was more than the tax collection in Manipur.
The department then initiated a probe and checked the details and financial statements of those salaried employees who had claimed refunds of more than Rs 1 lakh, the official said.
The investigation found that many employees had claimed more than 70 per cent deduction under section 80GGA of the IT Act which pertains to deductions made in respect to donations made by the taxpayers.
The official said upon digging further, it found that an NPO was issuing �bogus� donation receipts to taxpayers while not carrying out genuine development activity as it had claimed when it was given the tax exemptions tag.
�It was found that the NPO was not doing any valid development activity. The NPO was issued notice. Its tax exemption tag will be withdrawn soon,� the official said.
With the tax returns filing season inching closer to the deadline of July 31, the department has deployed its scanner to check such receipts. Action would also be taken against those taxpayers who had evaded tax knowing that the NPO was not genuine and was indulging in forgery, the official said.
Few other such NPOs and non-governmental organisations (NGOs) have come under the scanner of the IT department in the State following which the department has asked its various offices to keep tabs on such bodies indulging in education research and agriculture-related activities elsewhere.