PAN misused for HRA fraud? Need to worry
New Delhi, April 22, 2024
If you are one of those whose permanent account number (PAN) has been misused by someone to claim fake house rent allowance (HRA), you may have some reason to worry unless the person, who has given the wrong PAN, decided to update his or her income tax return.
But tax authorities are expected to give you a patient hearing and experts said those who have been affected by the fraud will have to prove that their PAN has been misused.
Last month, TOI had first reported how the income tax department had come across at least 8,000-10,000 cases of wrong reporting of PAN by unscrupulous elements. The income tax department said this did not mean that it was going to reopen past cases and had instead "underlined" that the e-verification had been done to "alert cases of mismatches of information for FY 2020-21 only without affecting the others".
The department did not comment on the issue or the number of taxpayers who have revised their returns.
"Although the department has clarified that there is no special drive, those whose PAN has been misused may still receive a notice or question confirming about their rental income in case such landlords appear in the sample collected by tax authorities. But they should not worry as the department is aware of the issue of misuse of PAN, rather than investigating deeply on rental income escaping in the hands of landlords. Taxpayers should, however, cooperate and provide appropriate response to such notice and in a timely manner to avoid inconvenience," said Kuldip Kumar, partner at Mainstay Tax Advisors.
The person whose PAN has been misused may need to provide some additional documents. "In case of persons whose PAN have been misused by persons receiving HRA, even if an assessment is reopened based on misquoting of PAN by the recipient of HRA, the PAN holder can establish that he/she is not in receipt of rent and seek for dropping of assessment against them. Following documents can be used to establish that PAN has been misquoted: (a) bank statement to show that no rent was received, and (b) self-sworn affidavit to state that the subject property is not owned by the PAN holder," said S Sriram, partner at Lakshmikumaran and Sridharan.
[The Times of India]
