When a Fake Company Uses Your PAN A ₹2.9 Cr Lesson
Focus Keyphrase: Fake company in PAN
Imagine finding out you’re the “director” of a company you never started—only after getting a tax notice for ₹2.9 crore. That’s exactly what happened to a Hyderabad man in May 2024. Cases like these are not rare—and they expose how identity misuse in company incorporation can lead to massive tax liability.
This blog breaks down how fake companies can be registered using your PAN, how such frauds go undetected, and what you can do to stay protected.
How Fake Companies Get Registered Using Your PAN
- No OTP or Video Verification Required (until recently)
- PAN + Aadhaar Mismatch Checks Ignored in early MCA filings
- Fraudsters download PAN from leaked databases or misused KYC
- They upload forged documents and declare fake addresses
- MCA system auto-approves company registration unless flagged
Legal Consequences Faced by the Victim
- Tax Demand: ₹2.9 crore demand notice under Section 143(1) from Income Tax Department
- Criminal Angle: Victim had no knowledge of the entity, yet became liable for non-filing, TDS defaults, and GST fraud
- ITR Mismatch: He found it during routine PAN login on the Income Tax portal
- MCA Response: No prior alert or physical address verification was triggered
What You Should Do If a Fake Company Uses Your PAN
Step-by-step action guide
| Step | Action |
|---|---|
| 1 | Log into www.incometax.gov.in & check for mismatched entities under “My PAN” |
| 2 | Visit MCA VPD to search your name/PAN |
| 3 | File a complaint with MCA using Form SCP (Serious Complaint) |
| 4 | File a police complaint and obtain a CSR copy |
| 5 | Submit grievance on CPGRAMS or Income Tax e-Nivaran portal |
| 6 | Write to PAN@incometax.gov.in with your ID proofs & complaint details |
| 7 | Notify the Jurisdictional AO about impersonation & file affidavit |
Legal References You Must Know
- Income-tax Act:
- Section 139A: PAN misuse leads to legal scrutiny
- Section 143(1): Summary assessment powers
- MCA e-filing Rules:
- As per Companies (Incorporation) Rules, PAN & Aadhaar are mandatory
- As of 2024, eKYC verification mandatory before DIN allotment
Expert View: A Simple Step That Can Save You
“Always file a NIL ITR, even if you have no income. It keeps your PAN active and flags unexpected filings,” says CA Priya Menon, a Delhi-based tax expert.
New Safeguards Introduced by MCA & CBDT (as of May 2025)
- PAN-based tracking of all DINs
- Aadhaar OTP-based director eKYC
- Stricter DIN allotment norms under Rule 10A
- MCA system to flag duplicate IPs, reused addresses, or forged documents
FAQ: Common Questions on PAN Misuse & Fake Companies
Q1. Can someone use my PAN to start a company without my consent?
Yes. Until recently, no OTP or biometric checks were enforced for director KYC.
Q2. Will I be liable for GST and IT dues of the fake company?
Initially yes—until you prove identity theft with police complaint and official affidavits.
Q3. How can I know if a company is using my name?
Use MCA Company Master Data or log in to your income tax account and check any unexpected filings.
Summary
PAN misuse is rising. A Hyderabad man received a ₹2.9 crore tax notice for a company he didn’t even know existed. Here’s how fake firms get registered using your PAN, how to check if you’re affected, and steps to take if it happens.