The applicant is not a taxpayer. How the PAN of the applicant was leaked and how it reached various nooks and corners of this country can only be explained by the Department of Income Tax. It is troubling to ponder the extent of this leak, as personal information should be protected with the utmost care.
The first question that arises is: how could the Permanent Account Number (PAN) of the applicant be registered in the Department of Income Tax if the applicant did not initiate this process personally? This situation not only raises concerns about privacy and security but also calls into question the efficiency and reliability of the systems in place to safeguard sensitive information.
The applicant deserves clarity and an in-depth investigation into the matter to ensure accountability and prevent such occurrences in the future. How can such a critical piece of identity be mismanaged without appropriate checks and balances?
Alarming situation
The fraudulent element misuses PAN, committing tax fraud that poses significant challenges to the revenue system.
This misuse reflects the incompetence of police and income tax authorities, who often struggle to effectively address such crimes due to a lack of resources and rigorous enforcement.
It highlights a broader issue of fraud that extends beyond individual cases, pointing to systemic weaknesses in regulatory frameworks and the urgent need for comprehensive reforms to improve oversight and accountability in financial transactions.
As this situation continues to evolve, it raises serious concerns about the overall integrity of financial systems and the impact on law-abiding citizens who bear the brunt of such deceitful practices.
Title: A Case of PAN Misuse and Institutional Inaction: A Citizen’s Struggle for Justice
Introduction
On 25th December 2024, Yogi M. P. Singh lodged a grievance with the Prime Minister’s Office under registration number PMOPG/E/2024/0184722. In his complaint, he highlighted serious concerns regarding corruption and inaction by the Income Tax Department, which he believes have severely undermined the integrity of the financial system.
These issues are specifically related to fraudulent financial transactions that have not only affected his financial standing but have also contributed to a wider atmosphere of distrust among taxpayers.
He further elaborated on the problem of the fraudulent use of his Permanent Account Number (PAN) GSWPS0850Q, where unauthorized entities seem to be exploiting his information for illicit activities, leading to significant distress and financial repercussions for him.
This situation raises alarming questions about the efficacy and responsiveness of the Income Tax Department in addressing such serious allegations, prompting Yogi to seek immediate intervention from higher authorities to ensure accountability and action against the perpetrators.
Background
The issue came to light during a police investigation under Crime No. 291/23, registered at Kotwali Katra, Mirzapur, Uttar Pradesh, under sections 420 IPC and 66C, 66D of the IT Act.
The police suspected money laundering through multiple bank accounts linked to the PAN in question, which raised significant concerns among local authorities and the community.
This investigation highlighted the intricate web of illicit financial activities, where large sums of money were being funneled through various entities, complicating the tracing process.
This is a classic case of financial fraud, exemplifying the urgent need for stricter regulations and monitoring systems to combat such offenses, ensuring that those perpetrating these crimes are held accountable, while also protecting the integrity of financial systems across the region.
As a result, the police requested detailed information from NSDL regarding:
- KYC details of linked bank accounts
- Branch manager contact information
- Usage logs and beneficiary details
NSDL responded stating that no Beneficial Owner (BO) account found against the PAN with any of its Depository Participants.
Departmental Response
The Income Tax Department, through the Chief Commissioner of Income Tax, Allahabad, officially closed the grievance on 13th January 2025, following what appeared to be a thorough review of the submitted information. They stated that bank account details were retrieved from the database and attached to their findings, which they believed would help clarify the situation.
However, the complainant rated the response “Poor,” expressing significant dissatisfaction with the resolution process. They pointed out that the reply did not address the core issue they had raised, which encompassed serious concerns about fraud, numerous fraudulent transactions, and police inaction.
The complainant felt that without proper attention to these critical elements, their situation remained unresolved and their trust in the authorities had been further diminished, leaving them to wonder what steps could be taken next to ensure their concerns were heard and acted upon adequately.
Appeal and Further Concerns
An appeal was filed on 14th January 2025 under number CBODT/E/A/25/0000182, addressed to Vivek Mishra, Pr. CCIT, Lucknow. The appeal raised critical questions:
- How were transactions worth ₹34.38 crore carried out without valid bank accounts?
- Why notices were sent to the complainant’s mobile and email, instead of those actually used by the fraudster?
- Why has there been no action against the tax evaders despite substantial evidence of fraud?
Key Evidence Presented
The complainant provided the following fraudulent details used to open accounts:
- Mobile Number: 7024188072
- Email: dngoldraipur18@gmail.com
- PAN: GSWPS0850Q
- Aadhaar: XXXX XXXX 9009
- Name Used: Mahesh Pratap Singh
- Address: Mirzapur, Uttar Pradesh
The Annual Information Statement (AIS) showed clear indicators of ongoing fraudulent activities:
- Business receipts: ₹4.65 crore
- GST purchases: ₹12.20 crore
- GST turnover: ₹16.32 crore
- Rent received: ₹1.19 crore
Analysis
This case reflects a systemic failure across multiple institutions:
- The Income Tax Department neglected to verify the authenticity of the PAN holder before associating massive financial transactions.
- The police investigation appears to be slow and ineffective, despite clear evidence of fraud.
- The banking sector did not flag suspicious activities linked to a single PAN with such high-value transactions.
Fraudsters have used the complainant’s personal contact details to perpetrate their malicious activities, highlighting a disturbing trend of identity theft and unauthorized access to sensitive information.
The next official communication sent to those same details raises serious concerns about data protection and procedural integrity amidst the fraud, as it implies a lack of caution regarding the handling of confidential information.
This situation not only jeopardizes the complainant’s privacy but also calls into question the effectiveness of current safeguards in place to protect against such breaches and the need for a comprehensive review of protocols to ensure that individuals are not further victimized in this already distressing scenario.
Conclusion
This grievance and appeal highlight the urgent need for:
- Stronger inter-agency coordination between police, tax authorities, and financial institutions.
- Robust verification mechanisms to prevent identity misuse.
- Transparent and accountable grievance redressal systems.
The case remains under appeal. We hope that the Chief Commissioner of Income Tax, Lucknow will take decisive action. They should manage the concerns raised and guarantee justice against such fraud.
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