Honest citizens will not be harassed by Income-tax Department: CBDT chief

Assuring law-abiding citizens that they will not be harassed by the income tax department, Central Board of Direct Taxes (CBDT) chairman Sushil Chandra said only those who have deposited more than Rs 2.5 lakh in demonetised notes in banks and have not filed their returns will be served notice for scrutiny.

CBDT, the administrative authority of the I-T department, has received huge data from banks on large deposits post-demonetisation. The department has used an in-house software to analyse this data and has segregated deposits, particularly those over Rs 1 crore, not matching with returns filed in the previous year. "There is no need to fear for any genuine person," Chandra said at a post-Budget seminar here on Monday.

The I-T department has segregated data on deposits of Rs 2 lakh and above where officials have been asked not to question anyone with deposits of up to Rs 2.5 lakh.

The CBDT chairman said his officials had already spotted several irregularities in deposits which were fit cases for scrutiny.

"We found that a trustee, running an educational institution, deposited Rs 2 lakh in each employee's accounts. One of them complained, and when a search was conducted on the trustee, he surrendered around Rs 10 crore," Chandra said. Action was required against all persons who misused the window given to people to deposit their holding of old Rs 500 and Rs 1,000 notes till December 30, he added.

The CBDT chief also said that from the next financial year, the tax department will withhold refund in scrutiny cases, though such measures will be in "exceptional circumstances". In exceptional circumstances, that too with a lot of riders, the commissioner can order withholding refund, he said.