If you are stuck in such a situation, here is what to do.

A young woman, Ms. Anjali, recently began her career at a multinational corporation, “Innovate Corp,” in the city of Vidyanagar. As it was her first year of formal employment, her fiancé, Mr. Rohan, advised her to file her income tax returns. Being new to the process, Anjali requested Rohan’s help. While attempting to register her on the official tax filing portal, Rohan was surprised to find that an account already existed under her Permanent Account Number (PAN). After resetting the password and accessing the account, he uncovered a shocking history of financial activity conducted without Anjali’s knowledge.

It appeared that tax returns had been filed in her name every year since 2018, when she was still a student. These were not minor filings; they involved substantial business transactions amounting to nearly ₹40 lakh annually for several consecutive years, with taxes of around ₹5 lakh paid each year. Further investigation revealed that in years with no business activity, returns were still filed showing income from bank deposits to claim tax refunds. Most alarmingly, Anjali’s aunt, Mrs. Geeta, an employee at “Sahara National Bank,” had been making numerous deposits into Anjali’s bank account, seemingly to generate interest income for herself.

Suspecting further foul play, Rohan advised Anjali to check her CIBIL score. The report confirmed their fears: a significant loan of approximately ₹45 lakh had been taken out in Anjali’s name for a luxury car by her aunt and cousin. While the loan installments and taxes had been paid on time, the entire operation was a blatant case of identity theft and financial fraud. When Anjali confronted her relatives, they dismissed her concerns casually, stating that the arrangement had been going on for years. This family, known for their affluent lifestyle and frequent international travel, had been exploiting their own niece’s identity for financial gain.

Advice in such cases

Discovering such a betrayal by close family members can be emotionally and financially devastating. It is crucial to act swiftly and methodically to protect your interests and rectify the damage.

• Secure all evidence immediately. This includes downloading past ITRs from the portal, getting bank statements, obtaining the CIBIL report, and saving any communication with the relatives regarding this issue.
• Immediately file a formal complaint with the Income Tax Department, flagging the returns as fraudulent.
• Report the fraudulent loan to the concerned bank’s head office and the RBI’s Banking Ombudsman. Also, file a dispute with CIBIL to correct your credit history.
• File a police complaint (First Information Report – FIR) for identity theft, cheating, and forgery.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

This situation involves several serious criminal offenses under Indian law. The primary statutes applicable are the Bharatiya Nyaya Sanhita (BNS) and the Information Technology Act, 2000.

• Section 315 of the Bharatiya Nyaya Sanhita, 2023 (BNS): This section deals with identity theft. Using someone’s PAN, bank details, and other personal identifiers to file taxes or secure loans without their consent is a clear case of identity theft.
• Section 318 of the BNS: This section covers cheating. By fraudulently using the victim’s identity to gain a financial advantage (like securing a loan or evading their own taxes), the relatives have committed the offense of cheating.
• Section 334 of the BNS: This pertains to forgery. Creating false documents, such as loan applications or tax filings in someone else’s name, constitutes forgery.
• Section 336 of the BNS: This section makes it an offense to use a forged document as genuine, which is what the relatives did when they submitted the fraudulent loan application and tax returns.
• Section 66C of the Information Technology Act, 2000: This specifically penalizes identity theft committed using electronic means, such as fraudulently using someone’s password or electronic signature.
• Section 66D of the Information Technology Act, 2000: This section punishes cheating by personation using a computer resource, which is directly applicable to creating a fake profile on the ITR portal and transacting online.

If you are the complainant

If you are accused in such a case, the consequences can be severe, involving both criminal prosecution and civil liability for the amounts involved.

• Do not ignore any legal notice or police summons. Engage with the process immediately.
• Begin compiling any evidence that might support your case, such as proof of payments made for the loan and taxes, even if the initial act was fraudulent. This might help in mitigation but does not absolve you of the crime.
• Understand that the victim has the right to pursue both criminal charges and civil recovery for any damages caused to their financial standing.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

As the victim, your priority is to reclaim your financial identity and hold the perpetrators accountable.

• Do not delay. The passage of time can sometimes be used by the accused as a defense, even if a weak one. Act as soon as you discover the fraud.
• Keep a detailed record of every action you take—dates of complaints filed, names of officials spoken to, and reference numbers for all correspondence.
• File complaints with all relevant authorities simultaneously: the police for the criminal act, the bank to dispute the loan, the Income Tax Department to correct your tax record, and CIBIL to fix your credit report.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

Initially, the police might be hesitant to file an FIR in cases involving family members, sometimes suggesting it is a “family matter.” However, you must insist on your right to register a complaint, as these are serious cognizable offenses. A well-drafted complaint prepared by a lawyer, clearly outlining the fraud with supporting evidence, will compel them to act. The investigation will be handled by the cybercrime cell or the Economic Offences Wing (EOW), given the financial amounts involved. They will collect evidence from the banks, the ITR portal, and other relevant sources, and will summon the accused for questioning as per the procedure laid down in the Bharatiya Nagarik Suraksha Sanhita (BNSS).

FAQs people normally have

What evidence is required?

Strong evidence is key to a successful prosecution. You will need:

• Screenshots and printouts from the Income Tax portal showing the fraudulent filings.
• The CIBIL report showing the unauthorized loan.
• Bank statements of the account used for fraudulent transactions.
• Copies of all complaints filed with the bank, tax authorities, and police.
• Any digital or written communication (emails, text messages) with the relatives where they admit to or discuss the matter.
• Loan documents obtained from the bank under the Right to Information (RTI) Act, if necessary.

How long will the investigation take?

Financial fraud investigations are complex and can be time-consuming. It may take anywhere from a few months to over a year. The timeline depends on factors like the cooperation of banks and other institutions in providing documents, the complexity of the transactions, and the workload of the investigating agency. A lawyer can help in following up with the authorities to ensure the investigation proceeds without undue delay.

Advocate Sudhir Rao, Supreme Court of India