PAN Card Misuse Fraud prevalent in India: Massive Scam Exposed

A widespread PAN card misuse scam has been uncovered across India, targeting vulnerable groups and leading to fraudulent property transactions. Experts advise regular AIS checks and reporting misuse to authorities.

It came as a big expose that a new PAN card misuse scam has surfaced in India and several cases have already been reported from all over the country. The current scam involves fake PAN numbers of deceased persons, illiterate persons and those who rarely use their PAN card to conduct property related transactions.

The fraud is usually discovered only after the Income Tax Department raises notices with the innocent victims. In one such case, a senior citizen and homemaker from Mumbai with poor literacy and suffering from cancer received a notice that she had sold a property worth Rs 1. 3 crore in 2010-11. The Income Tax Appellate Tribunal (ITAT) confirmed that her PAN had been used for the registration of the property in question.

Other examples include MP and Rajasthan, where a woman who died and a small shopkeeper were sent notices that they transacted for crores. There are always those who are easy targets for fraudsters, and they include the elderly people, farmers and students.

Ketan Vajani, a chartered accountant emphasised that PAN misuse has posed problems for people in relation to the following ways: Large demands for taxes are raised during assessments of transactions that are not related to the PAN holder. CBDT has directed those people who have received any unwanted communication or have seen their PAN details appearing where they should not have, to file a complaint with the police.

Ameet Patel of Manohar Chowdhry & Associates, a tax partner, said that it is crucial for the taxpayers to review their AIS and report if there are any wrong entries as soon as possible. He also urged the Income Tax Department to offer a link on its website to report any misuse.

The CBDT also made it clear that PAN is not closed at the time of death of the holder for the purpose of the completion of any proceeding. It is required that the family members or legal heirs of the deceased person report the death to the jurisdictional assessing officer and produce requisite documents.

There are, however, suggestions that have been made for enhancing this system whereby the issuing of a death certificate automatically alerts the Income tax department that some fraudulent transactions have been done using the PAN of the dead person.

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While the crackdown on this massive fraud scheme goes on, the people are encouraged to be wary of any fraudulent activities involving their PAN cards and report any such cases to the police immediately.