The Importance of Filing Correct ITRs: A Hyderabad Case That Teaches a Hard Lesson
August 8, 2025
Income Tax Return (ITR) filing is not just a financial obligation—it is a legal declaration of one’s income, deductions, and taxes paid. Every year, thousands of salaried professionals across the country seek assistance in filing their ITRs. Unfortunately, many are lured by unqualified agents who promise hefty refunds by manipulating deductions, and fall into legal traps that can cost them heavily.
In this article, we highlight the importance of filing ITRs accurately, share a real-life case of a Hyderabad-based taxpayer who suffered due to fake deductions, and explain the serious consequences one may face for incorrect filings.
Hyderabad Case: A Refund That Cost More Than Expected
Recently, Zentax Business Consultants was approached by a salaried individual from Hyderabad, who had received a summon from the Income Tax Investigation Wing. The department had flagged his return for unsubstantiated deductions under various heads. A notice followed, asking him to produce receipts and documentary evidence—or file an Updated Return if the deductions were erroneous.
Upon our review, it was discovered that the taxpayer had been misled by a so-called “Tax Consultant” in Hyderabad, who offered to file his return for just ₹499 while promising a refund of ₹3.5 lakhs. The consultant demanded ₹1.5 lakhs in cash upfront as a cut from the anticipated refund. However, all deductions claimed in the return were fabricated and lacked any proof.
When the Income Tax Department initiated inquiry and sent a summon, the agent disappeared. Left without any receipts or documents, the taxpayer came to us for representation and remediation.
Consequences Faced by the Taxpayer
Due to the false deductions and inflated claims, the taxpayer had to:
· – File an Updated Return (ITR-U) removing the fake deductions.
· – Pay the entire refunded amount back to the Government.
· – Incur additional tax liability, interest, and penalty under Section 139(8A).
· – Face potential prosecution under Sections 270A, 276C, and 277 of the Income Tax Act, which allow up to 200% penalty and even imprisonment.
Worst of all, the ₹1.5 lakh paid to the agent was non-recoverable. The taxpayer was the only person held legally responsible because the ITR was filed from his own portal, with his own digital declaration.
Why This Is Happening Across Hyderabad
At Zentax Business Consultants, we receive daily calls from salaried employees asking the same question:
“How much refund can you get me?”
This mindset is driving many to fall prey to fraudulent agents operating in localities across Hyderabad—especially during the tax season. These individuals are not registered professionals but exploit the taxpayer’s lack of awareness.
They often:
· – Claim false 80C deductions like LIC, PPF, ELSS without investments.
· – Invent HRA claims without rent receipts.
· – Use fake donations for 80G benefits.
· – Promise a refund and take a percentage share as cash.
Legal Reality: The Taxpayer Is Liable, Not the Consultant
Important Reminder:
Once the ITR is filed using your PAN and login credentials, you are held legally responsible. Not the agent. Not the consultant.
The Income Tax Department deals only with the assessee, not the preparer. Ignorance is not a defense in court or before the tax authorities. Filing fraudulent returns is considered willful misstatement, which can trigger severe penalties and prosecution.
How to File ITR Safely
✅ Always file ITR through a registered CA firm or a qualified tax professional.
✅ Avoid agents who promise “guaranteed refunds.”
✅ Maintain documentary proof of all deductions you claim.
✅ Consult a professional for guidance before responding to notices.
What We Offer at Zentax Business Consultants
Located in Hyderabad, we at Zentax Business Consultants are committed to ethical and accurate tax filing practices. Our firm provides:
– Representation before Income Tax Authorities
– Support in filing Updated Returns
– Legal advice in notice/summon matters
– Full transparency and documentation
We do not promise refunds—we promise compliance.
Conclusion
This Hyderabad case highlights how chasing refunds through illegitimate means can lead to financial loss, stress, and long-term legal trouble. Always remember—filing correct returns is your legal responsibility. No consultant will face the consequences on your behalf.
Choose your tax advisor wisely. Choose compliance over shortcuts.
Get in Touch
Email: hello@zentax.com
Phone: +91-7995510999
Tags :
Income Tax
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