CBI Court Convicts Seven for Large-Scale Income Tax Refund Fraud Using Fake Identities
Background of the Fraud Case
A CBI Court in Chennai has delivered a significant judgment in an income tax refund fraud case involving manipulation of departmental systems, forged documentation, and fictitious assessee identities. On 27 March 2026, the court pronounced conviction against seven persons, including a former Senior Tax Assistant of the Income Tax Department, for orchestrating and participating in an elaborate refund scam.
The prosecution was initiated following a formal complaint lodged by the Assistant Commissioner of Income Tax, Chennai, which led to the registration of an FIR by the Central Bureau of Investigation on 31 December 2019. The complaint alleged that fraudulent refunds had been systematically generated over several years by misusing official access and fabricating records.
Investigations established that, between 04.06.2015 and 31.08.2019, the Income Tax Department’s refund mechanisms were exploited to raise and issue bogus refunds. This was achieved through falsified data entries, forged documents, and non-existent or impersonated assessee profiles. The fraudulent refunds caused a wrongful loss of around ₹2.38 crore to the Income Tax Department.
Parties Involved and Nature of Conviction
Accused Persons
The CBI Court, Chennai, on 27.03.2026, convicted the following individuals in connection with the fraud:
- Babu Prasath Kumar, then Senior Tax Assistant in the Department of Income Tax, Chennai
- Six private individuals:
- B Praveen Kumar
- Trewellyn Marion Corneille
- P Stephen
- A Gopikrishna
- Venkatesh
- C Gunaseelan
Sentencing
All seven accused were sentenced to:
- Rigorous Imprisonment for 4 years, and
- Aggregate monetary penalty of ₹2.4 lakh imposed by the court.
The court delivered the sentence after a full-fledged trial, during which documentary and digital evidence, as well as witness testimonies, were examined to establish the chain of fraudulent activities and the roles of each accused.
Modus Operandi of the Income Tax Refund Fraud
System Manipulation and Forged Documentation
The investigation conducted by the Central Bureau of Investigation revealed a structured and deliberate method adopted by the accused to defraud the Income Tax Department:
Use of forged documents
- Documents were fabricated or altered to depict false income and tax deductions.
- Fictitious financial information was used to justify the issuance of refunds that were never legitimately due.
Creation and use of fictitious identities
- Non-existent or impersonated assessee identities were used within the Income Tax system.
- Identity details were manipulated to generate refund claims under false profiles.
Systematic issuance of fraudulent refunds
- The internal mechanism for processing refunds was misused.
- The accused allegedly manipulated records so that refunds were processed as if they were valid and lawful.
Role of the Insiders
The probe concluded that the fraud could not have been executed without internal assistance from within the department.