🚨 The Case of the Misused PAN: A Deep Dive into Police Accountability and Financial Fraud

This blog post addresses a critical and concerning case where substantial evidence of Permanent Account Number (PAN) misuse and alleged financial fraud involving a transaction amount of around ₹350 million appears to have been inadequately investigated by the Uttar Pradesh Police. The complainant, Yogi M. P. Singh, has raised serious questions regarding the competence and accountability of the investigating officers, particularly in light of the detailed tax information provided.

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1. The Core Question: Can ₹350 Million be Transferred Without Bank Account Numbers?

The fundamental financial question raised by the complainant is: “Whether the transaction of Rs. 350 million is possible without bank account numbers?”

The direct and definitive answer, especially in the context of the large-scale transactions and Tax Deducted at Source (TDS) detailed in the grievance, is No, large amounts like ₹350 million (or ₹4 Crore in tax deposited) cannot be transacted or taxes deposited without associated bank accounts.

• Financial Traceability: Every formal, documented financial transaction of this magnitude in India, especially those involving the formal banking channel and the tax system (TDS/TCS), requires a corresponding bank account number for the funds to be transferred (the ‘Amount Paid/Credited’) and for the deducted tax (TDS) to be deposited with the public exchequer via the Tax Deduction and Collection Account Number (TAN) holder.
• TDS Mechanism: As highlighted in the example of SV FACILITY SERVICES PRIVATE LIMITED, taxes were deducted under Section 194C (Payments to contractors and sub-contractors). The tax deducted is ultimately deposited with the Income Tax Department through NSDL. The payment that led to this deduction (e.g., ₹9,200,000 paid/credited) must have originated from the deductor’s bank account and been transferred to the deductee’s (the victim whose PAN was misused) bank account.
• Conclusion: The very nature of the evidence provided—detailed TDS transactions with a Deductor’s TAN and an aggregate amount of tax deposited—implies the involvement of bank accounts at both the payer (deductor) and the beneficiary (the entity/individual who misused the PAN) ends. The investigation’s failure to utilize this financial trail, which is the cornerstone of any white-collar crime investigation, points to a severe lapse. The police can and must trace the flow of funds using the Deductor’s details and the financial instruments used to pay the alleged victim.

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2. A Reflection of Incompetence: Police Accountability in Question

The most scathing part of the grievance is the allegation that the police report, which claims the “Allegations are not proved,” reflects the incompetence and lack of accountability of the personnel involved, specifically Inspector Kotwali Katra, Mr. Jitendra Kumar.

Substantial Evidence Ignored

The complainant has provided a wealth of information that should serve as a clear roadmap for the investigation, yet it has apparently been set aside:

• Detailed Tax Data: “Tax information summary and permanent account number based data downloaded from the website of income tax has been provided to the police.” This includes the names and TANs of multiple deductors (like SV FACILITY SERVICES PRIVATE LIMITED) and the specific amounts and dates of transactions.
• The Number of Companies: The data reportedly includes details of more than two hundred companies that misused the victim’s PAN. This is not a single, isolated transaction but a wide network of potential fraud.
• The FIR: FIR No. 291/2023 was registered under Section 420 IPC (Cheating) and 66C, 66D IT Act (Identity theft and cheating by personation by using a computer resource), establishing a clear legal basis for a cyber-financial investigation.

The Path to Accountability

When an investigating officer (IO) dismisses an allegation with “Allegations are not proved” despite being furnished with robust, official documentation from the Income Tax Department, it raises grave concerns:

• Failure to Follow the Money Trail: A competent IO would have issued notices under Section 91 of CrPC to the Income Tax Department, NSDL, and the banks of the involved Deductors (using their TANs) to obtain the underlying payment details, including bank account numbers, beneficiary names, and transfer modes (NEFT/RTGS/Cheque). This is the key to identifying the real perpetrators who received the ₹350 million in credited income.
• Misleading the Victim: The complainant asserts the police are “only misleading the victim instead of searching the offenders.” This cryptic approach in a state committed to “good governance” must be seriously reviewed by senior ranks. Bogus or incomplete reports not only lower the dignity of the police force but also compromise the victim’s constitutional right to a fair and thorough investigation.
• Harassment: The victim’s stated reason for dis-satisfaction being “Harassment by official” following the case closure with a vague report highlights the potential misuse of authority or a severe neglect of duty by the investigating personnel.

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3. The Need for Senior Intervention in Uttar Pradesh

The competence of the Uttar Pradesh Police, in this specific case, is rightfully called into question. The investigation has stalled despite the presence of “substantial evidence.”

The grievance, addressed to the Prime Minister’s Office (PMOPG) and the Uttar Pradesh Chief Minister’s Secretariat (GOVUP), names high-ranking officials, including Shri Arvind Mohan (Joint Secretary, Government of Uttar Pradesh), indicating the complainant’s escalation of the matter.

Steps for Remedial Action:

1. Immediate Reopening of Investigation: The closure based on an unsubstantiated report must be reversed. Given the magnitude of the fraud (₹350 million), the case warrants reinvestigation.
2. Specialized Team: The matter should be transferred from the local police station to a specialized unit, such as the Economic Offences Wing (EOW) or a dedicated Cyber/Financial Crime Cell, which possesses the necessary expertise to handle complex TDS and PAN misuse trails.
3. Strict Supervision: A senior officer (Superintendent of Police or above) should be appointed to directly supervise the investigation, ensuring that all documentary evidence (the 55-page PDF attachment and tax data) is properly integrated into the case file and acted upon.
4. Action Against Erring Officials: If a formal inquiry reveals that the investigating officer, Mr. Jitendra Kumar, intentionally or negligently filed a false or incomplete report, departmental action must be initiated to uphold the principle of police accountability.

The police force’s primary duty is to investigate crime diligently. In a financial fraud case where the trail is clearly laid out in government tax documents, the failure to follow that trail constitutes a serious dereliction of duty and undermines public faith in the system. The evidence is not ‘unproved’; it has simply been left uninvestigated.

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Conclusion: Justice Must Follow the Money

The misuse of a PAN for transactions totaling approximately ₹350 million and the subsequent deposit of ₹4 crore in tax is a major financial crime with wide-reaching implications. The sheer volume of evidence provided by the complainant is a golden opportunity for the police to successfully bust a large-scale racket. The final report should reflect an exhaustive investigation, not a cryptic dismissal. The Uttar Pradesh Government must ensure that justice, in this case, is served by competently following the unassailable evidence of the money trail.

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Would you like me to use the provided details to draft a formal letter of representation to the concerned senior officers for the re-opening and transfer of the investigation?