In a startling case that has exposed major weaknesses in India’s tax refund system, a former bank employee in Nagpur has been booked by the Central Bureau of Investigation (CBI) for fraudulently claiming tax refunds worth over ₹1.26 crore. The man, identified as Rattandeep Borkar, allegedly exploited outdated system access and loopholes in PAN (Permanent Account Number) records to carry out the scam.
A Clever Exploit of an Overlooked Loophole
Investigators say the fraud revolved around unclaimed Tax Deducted at Source (TDS) refunds that lacked valid PAN numbers. Borkar, once an employee of Canara Bank, found a way to revise old TDS returns, inserting PAN numbers of acquaintances and others he recruited for the scheme. This made it appear as though those individuals were eligible for tax refunds.
What made the operation possible was Borkar’s continued access to bank systems even after his termination. His outdated login credentials, which should have been deactivated, allowed him to access sensitive financial records and make unauthorized changes. He reportedly submitted forged documents, including Form 27A, to support the revised refund claims.
Fraudulent Refunds Across Multiple Years
The scam covered TDS refunds from financial years 2011–12 to 2018–19, with most fraudulent transactions executed between July 2023 and September 2024. According to the FIR filed by the CBI, Borkar targeted refunds processed at four Canara Bank branches in Nagpur.
Over time, he added 92 different PAN numbers to the revised TDS filings. In return for allowing him to use their details, some of these PAN holders reportedly received kickbacks. The total fraudulent refund amount reached ₹1.26 crore, a significant sum diverted from government coffers.
The Investigation and Its Wider Impact
The case came to light after discrepancies were flagged by the Income Tax Department, which noticed irregular refund claims against years-old TDS records. Following an internal probe, the department referred the matter to the CBI, which uncovered the elaborate operation.
The CBI has not only booked Borkar but is also investigating unidentified officials at the involved bank branches who may have either assisted or overlooked the suspicious activities. Notices have also been sent to the individuals whose PAN numbers were used, demanding explanations for the refunds credited to their accounts.
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A Pattern of TDS Refund Exploitation
This incident is part of a growing number of TDS refund frauds uncovered in India. In recent years, similar cases have surfaced in Uttar Pradesh and Tamil Nadu, where former Income Tax officials and private individuals colluded to misuse outdated system access and claim fraudulent refunds.
Financial experts believe these scams highlight a broader issue: weak deactivation protocols for system access, insufficient real-time verification of PAN-linked data, and delayed oversight of TDS refund claims. “It shows how legacy data and lax controls can be misused even years later,” said a senior tax official requesting anonymity.
The CBI continues its investigation, and the Income Tax Department has pledged stricter monitoring of TDS refunds and revised return filings moving forward.