In a major setback to the government’s flagship initiative for tax transparency, the Central Bureau of Investigation (CBI) has arrested an Indian Revenue Service (IRS) officer of Deputy Commissioner rank, Vijayendra, along with an associate named Dinesh Agarwal. The arrests are part of a wider investigation into attempts to sabotage the Faceless Income Tax Assessment Scheme, which was designed to minimize human discretion and physical interaction between taxpayers and officials.
The CBI has filed a case against Vijayendra, two Income Tax Inspectors, five Chartered Accountants, a private individual, and other unidentified persons. They are accused of leaking confidential assessment information and soliciting bribes in exchange for favorable income tax orders.
Insider Leaks and Corruption: How the Scheme Was Undermined
Introduced to ensure objectivity and reduce corruption, the Faceless Scheme of Assessment aims to shield taxpayers from personal interactions with tax officers. However, the investigation revealed that the accused allegedly collected and distributed sensitive insider data such as the names of assessing officers, the scrutiny issues involved, and case details concerning high-value taxpayers.
ALSO READ: Call for Cyber Experts: Join FCRF Academy as Trainers and Course Creators
Armed with this privileged information, the accused allegedly approached taxpayers facing substantial assessments and offered “favorable orders” in return for pecuniary benefits. The CBI’s preliminary enquiry, initiated after a formal complaint from the Income Tax Department, unearthed strong evidence, leading to the registration of a formal case.
Nationwide Searches Unearth Incriminating Evidence
On February 6, 2025, CBI teams conducted coordinated searches across 18 locations, spanning Delhi, Mumbai, Thane, Bengaluru, Kottayam (Kerala), West Champaran (Bihar), and other cities. Investigators seized incriminating documents, evidence of bribe transactions, digital devices, and communication records linked to the insider leaks.
ALSO READ: Call for Cyber Experts: Join FCRF Academy as Trainers and Course Creators
Both arrested individuals have been presented before the jurisdictional court, and judicial proceedings are underway. Authorities indicated that more arrests could follow as the investigation progresses, possibly exposing deeper systemic vulnerabilities within the tax administration system.
The CBI emphasized its commitment to protecting the integrity of transformative governance initiatives like the Faceless Scheme, and ensuring that officers who violate public trust are held accountable.