Overview of the iX Global MLM Binary Operation

BACKGROUND THE iX Global MLM :

The case involving iX Global and its associated entities is a complex matter with international 

ramifications, involving promoters operating from multiple countries. Currently, one Indian citizen, 

Viraj Suhas Patil, is in judicial custody (JC) in Kolkata (he has access to the internet and phone in the 

JC). Meanwhile, two other key individuals, Tushar Bhikubhai Patel (Indian) and Joseph Anthony 

Martinez (US citizen), have been declared absconders.

The individuals have orchestrated a complex web of shell companies and financial operations, 

mobilising victims' funds through various methods, including asking victims to deposit funds into 

multiple mule bank accounts in India, the US, the U.K., Africa, cryptocurrency wallets, money mules, 

money changers, and hawala operators.

Before launching iX Global:

The three individuals, Joseph Martinez, Viraj Patil, and Tushar Patel, collaborated in a similar 

MLM scheme:

Kuvera Global (the MLM operation):

• Joseph Martinez promoted this MLM operation.

• Viraj Patil was part of his recruitment network ("downline").

Infinox (Unregistered Forex Platform connected to Kuvera Global):

• Tushar Patel acted as the "introducing broker" for Infinox (IX CAPITAL GROUP 

LIMITED), an unauthorized forex platform.

• He allegedly orchestrated the money-siphoning network for Infinox, moving funds 

illegally.

This prior partnership laid the groundwork for their roles in iX Global’s operations.

Claims by "iX Global"

iX Global claimed to be a Direct selling- MLM company using the binary MLM compensation plan to 

promote the following:

1. 28-Day Subscriptions for Online Education in financial markets and cryptocurrency trading.

2. Signals for Forex Trading.

3. NFTs of Cryptoland.

4. The Debt Box - Decentralised Licenses for cryptocurrency mining.

What did it “really” promote?

1. Joining the opportunity - US $ 50/115/145/185

2. Subscriptions(28 days) for Algorithmic trading bots, which can only be activated on the 

"accounts" of the victims depositing money with TP Global FX (and not any other forex 

trading platform) - the Algo trading bots were shown to generate monthly returns of 5-25%

Strategy India – STAB Division -4/2025 2

3. Deposits with TP Global FX for forex trading where Algo trading bots by iX Global were

activated.

4. Deposits in Cryptoland - NFTs associated with a "game," committing returns (US$50-250 

per day).

5. Investments in "The Debt Box", where crypto meets commodities promising ROI.

6. Deposits in FX Opulence (after TP Global FX got listed in the RBI Alert list and ED froze 

the accounts). Here, too, the victims were made to subscribe to the algo trading bots of iX

Global. About “x%” of the amount visible on the TP Global FX app was transferred to this 

platform if the victims deposited an "x" amount.

Victims were made to deposit/transfer funds, which were layered and 

siphoned out of India using the following modes: (compiled as per the 

emails by the victims)

1. Charges for Joining - US $ 50/115/145/185

• Mobile wallets of upline

• Generated epins via their commissions(payouts to the members)

• Bank accounts (Mule accounts - Not in the name of IX Academy Private Limited)

• Bank account (in the name of IX Academy Private Limited)

• Payment gateway to the bank account of iX Academy Private Limited

• Credit cards/debit card (stripe)

• PayPal

• Coin payments

• Money Mules

2. Subscriptions(28 days) for Algorithmic trading bots and online education, which can only be 

activated on the "accounts" of the victims depositing money with TP Global fx (and not any 

other forex trading platform) - the Algo trading bots were shown to generate monthly returns 

of 5-25% (on the presentation of iX Global).

• Mobile wallets of upline

• Generated epins via their commissions(payouts to the members)

• Bank accounts (Mule accounts - Not in the name of IX Academy Private Limited)

• Bank account (in the name of IX Academy Private Limited)

• Payment gateway to the bank account of IX Academy Private Limited

• Credit cards/debit card (stripe)

• PayPal

• Coin payments

• Money Mules

3. Deposits in TP Global FX for forex trading where algo trading bots by iX Global are to be 

activated.

• Mule bank accounts

• International banks

• Cryptocurrency wallets

• Money Mules

• Transfer from the commissions payable (earned by joining new members and their renewals

Strategy India – STAB Division -4/2025 3

4. Deposits in Crypto land - NFTs associated with a "game," committing returns (US$50-250 

per day).

• Cryptocurrency wallets(shared by IX Global)- BTC and XRP.

• Bank deposits (charging 5% fees extra)

• Money mules

• Transfer from the commissions payable (earned by members from getting new joining’s and 

renewals of subscriptions)

• Transfer from funds visible on TP Global fx platform.

• Cryptocurrency wallets (Shared by IX Global)

• From Payouts to the members -Transfer from the commissions payable (earned by joining 

new members and their renewals)

• Transfers from funds shown in the application of TP Global FX

5. Investments in "The Debt Box", where crypto meets commodities promising ROI.

• Cryptocurrency wallets (shared by iX Global- X Nodes)

• Cryptocurrency wallets (shared by the debt box on the lite papers)

• Money Mules

• Transfer from the commissions payable (earned by joining new members and their renewals)

• Transfers from funds shown in the application of TP Global FX.

6. Deposits in FX Opulence for Forex Trading (after TP Global FX got listed in the RBI Alert 

list and ED froze the accounts) Here, too, the victims were made to subscribe to the algo 

trading bots of iX Global and were committed to ROI. About 50% of the amount visible on 

the TP Global FX app was transferred to this platform if the victims deposited an "x" amount.

• USDT

• Mule accounts

• Money mules

• Transfers from funds shown in the platform of TP Global FX

The scale of operations by iX Global to conceal the main beneficiaries 

a. 54+ Mule Bank Accounts in India, receiving funds via net banking and credit cards 

(including platforms like Coin Payments and Stripe). – Reported by Victims.

b. 7 Foreign Bank Accounts (locations undisclosed) used for cross-border transfers. – Reported 

by Victims.

c. 15 Bank Accounts in the US, with 8 accounts with iX Global LLC being the beneficiary and

6 accounts under the name of Joseph Anthony Martinez. – Reported by US SEC. 

d. 24 Cryptocurrency Wallets used to obscure transactions involving digital assets. – Reported 

by Victims. 

e. 1 Hawala Operator: Facilitated unrecorded cash transfers. – HuMINT.

f. 5 Money Mules: Individuals used to layer transactions and avoid detection.-HuMINT

+

g. Over 180 Indian bank accounts were identified (by ED) in the Economic Offences Wing 

(EOW), as per Mumbai Police chargesheet (CNR: WBCS010009682023)

Strategy India – STAB Division -4/2025 4

Violations by iX Global: (and applicable sections of various laws)

1. The SEBI Act, 1992 (Section 11AA)

iX Global operated an unregistered Collective Investment Scheme (CIS), defined as 

"any scheme or arrangement where contributions from investors are pooled and 

managed on their behalf, generating profits or income for the investors, with no 

control by the investors over the management of the scheme".

iX Global’s Collection of investments from the "investors":

o The Debt Box – Collecting deposits for node licenses where the investors were 

promised returns based on various investment types.

o Cryptoland—iX Global collected more than INR 104.7 Crores from investors for 

investment in NFTs (land and avatar) at US$1,500/ US$1,750 per unit. The NFTs 

were promoted as having returns of US$50 – 250 per day.

The members who convinced others to invest in NFTs were paid a commission of 

US$50-250 per referral.

Applicable Sections of the Banning of Unregulated Deposit Schemes Act (BUDSA), 

2019 : 

The activities of iX Global, as described, engage multiple provisions of BUDSA 2019 

due to the operation of unregistered schemes, solicitation of deposits, and fraudulent 

promises of returns. Below is an analysis of the relevant sections:

A. Section 3: Banning of Unregulated Deposit Schemes: This section prohibits 

the promotion, operation, or acceptance of deposits under unregulated 

schemes.

Application: iX Global operated a "Collective Investment Scheme" (CIS) 

without registration under SEBI, making it an unregulated deposit scheme 

under BUDSA 2019.

The "Debt Box" (node licenses) and "Cryptoland" (NFT investments) 

involved pooling funds from investors, which qualifies as an "Unregulated 

Deposit Scheme" under Section 2(17) of BUDSA 2019.

Violation: Accepting deposits under these schemes directly contravenes 

Section 346.

B. Section 5: Wrongful Inducement :This section penalises false or misleading 

statements to induce participation in unregulated schemes.

Application: Promising returns of $50–$250/day on NFTs and node licenses 

constitute "wrongful inducement" under Section 546.

The referral commissions ($50–$250 per referral) incentivised participants to 

recruit others, amplifying deceptive claims about profitability.

Violation: These actions meet the "deliberately concealing material facts" 

criteria to solicit deposits.

C. Section 21(3): Punishment for Fraudulent Default: This section applies to 

fraudulent defaults in repaying deposits or providing promised services.

Application: Investors were promised returns tied to node licenses and NFTs, 

which iX Global failed to deliver. This constitutes a fraudulent default under 

Section 21(3)

Strategy India – STAB Division -4/2025 5

The lack of investor control over fund management (a hallmark of CIS) 

further underscores the scheme's fraudulent nature.

Penalty: Imprisonment of 3–10 years and fines up to twice the collected 

funds.

D. Section 23: Punishment for Wrongful Inducement: This section penalises 

individuals who knowingly make false statements to promote unregulated 

schemes.

Application: iX Global’s marketing materials( including the ones promoted 

by it to the participants) and referral commissions involved false assurances 

of guaranteed returns, violating Section 23.

Penalty: Imprisonment of 1–5 years and fines up to ₹10 lakh.

E. Section 25(1): Liability of Companies and Management: This section holds 

companies and their leadership accountable for violations.

Application: iX Global (iX Global LLC and Pochen Global Services Private 

limited), as a corporate entity, and its directors/promoters are liable for 

operating the unregulated schemes. Management cannot evade liability unless 

they prove a lack of knowledge.

Penalty: Prosecution of both the company and responsible individuals.

Conclusion : The iX Global case involves Sections 3, 5, 21(3), 23, and 25(1) 

of BUDSA 2019. The scheme's structure a unregistered CIS, false returns, 

and referral incentives aligns with the Act's prohibitions on unregulated 

deposits, fraudulent defaults, and wrongful inducement. 

Penalties include Imprisonment, fines, and asset confiscation to repay 

investors.

2. The FEMA Act, 1999: iX Global promoted an unregistered forex 

trading platform, TP Global FX (and later FX Opulence, after TP Global FX 

was listed in the alert list of RBI). They charged a 28-day subscription fee 

(US$50/115/145/180) for their algorithmic trading bots, which would only 

work on the forex trading platform provided by TP Global FX (and later, the 

same was committed for FX Opulence). The promoters instructed the victims 

to deposit money into various mule and shell company bank accounts. These 

funds were then layered and siphoned out of the country. As per ED's press 

release, the funds were used to buy properties.

Legal Implications for iX Global Under the Foreign Exchange Management 

Act, 1999: The activities of IX Global, as described in the case, engage 

multiple provisions of the Foreign Exchange Management Act (FEMA), 

1999, along with related regulations and enforcement mechanisms. Below is 

a structured analysis of the applicable sections, penalties, and broader 

implications of the violations.

Summary of Key Findings

iX Global allegedly operated an unregistered forex trading platform, 

facilitated unauthorised foreign exchange transactions, and orchestrated a 

complex money-laundering scheme involving shell companies and offshore 

asset acquisition. These actions contravene Sections 3, 4, 8, 10, and 13 of

Strategy India – STAB Division -4/2025 6

FEMA, with additional scrutiny under the Prevention of Money Laundering 

Act (PMLA), 2002. The Enforcement Directorate (ED) has identified 

violations related to fund diversion for property purchases, triggering asset 

confiscation proceedings.

A. Section 3: Prohibition on Unauthorised Forex Transactions

Subsection 3(a):

Violation: iX Global promoted forex trading platforms (TP Global FX 

and FX Opulence) that the RBI did not authorise. These platforms were 

later listed on the RBI's "Alert List" of unauthorised entities.

Application: Operating forex trading platforms without RBI authorisation 

violates Section 3(a), which prohibits dealings in foreign exchange 

except through authorised persons.

Subscription fees (US$50–180) collected for algorithmic trading bots 

constituted unauthorised forex transactions, as the platforms were 

unregulated.

Subsection 3(c):

Violation: Funds were deposited into mule and shell company bank 

accounts before being siphoned abroad.

Application: Receiving payments through unauthorised channels (shell 

companies) without corresponding inward remittances violates Section 

3(c).

The ED's investigation confirmed these funds were layered and 

transferred overseas, evading forex controls.

B. Section 4: Restrictions on Holding Foreign Assets

Violation: Proceeds from the scheme were used to purchase properties 

abroad, as reported by the ED.

Application: Indian residents are prohibited from acquiring immovable 

property outside India without RBI approval. 

iX Global’s promoters failed to declare these acquisitions, rendering the 

transactions illegal.

C. Section 8: Restrictions on Transfers

Violation: Funds were transferred abroad without legitimate purposes 

under the guise of "subscription fees" and "algorithmic trading."

Application: Section 8 restricts transfers outside India that circumvent 

FEMA provisions. The layered transactions through shell companies 

violated the Section. The use of mule accounts to disguise the origin of 

funds further contravenes permissible transfer mechanisms.

D. Section 10: Liability of Authorised Persons

Violation: The promoter of iX Global(Viraj Suhas Patil/Joseph Anthony 

Martinez) misrepresented TP Global FX as a legitimate forex service 

provider despite lacking RBI authorisation

Strategy India – STAB Division -4/2025 7

Application: Only entities authorized under Section 10(1) can deal in 

forex transactions. By operating unauthorised platforms, iX Global

breached this provision.

Promoters who instructed victims to deposit funds into shell accounts are 

liable as "persons in charge" under Section 10(5).

E. Section 13: Penalties for Contraventions

Violation: The scheme involved quantifiable forex violations 

(subscription fees, fund transfers) and non-quantifiable offences 

(operating unregistered platforms).

Application: Under Section 13(1), penalties can reach three times the 

contravened amount (e.g., US$50–180 fees × number of subscribers).

For non-quantifiable offences (e.g., unauthorised platform operation), 

penalties may extend to ₹2 lakh per violation.

The ED's findings of property purchases abroad could trigger additional 

fines under Section 13(1A) for undisclosed foreign assets.

F. Section 37A: Confiscation of Equivalent Assets

Violation: The ED identified domestic properties purchased using illicit 

funds.

Application: Section 37A empowers authorities to confiscate assets in 

India equivalent to the value of undisclosed foreign holdings.

This provision complements PMLA actions, enabling the ED to seize 

properties acquired through forex violations.

Overlap with PMLA and RBI Directives

a. Money Laundering (PMLA):Layering funds through shell companies 

and purchasing properties abroad constitutes money laundering under 

PMLA. The ED can independently prosecute IX Global’s promoters 

for this.

b. RBI's Alert List: TP Global FX was flagged as an unauthorised 

platform, making any transaction through them illegal under RBI's 

Electronic Trading Platform (ETP) Directions, 2018 

https://www.rbi.org.in/scripts/Bs_viewcontent.aspx?Id=4235

c. Liberalised Remittance Scheme (LRS) Abuse: Subscriptions

collected in USD likely violated the LRS limit of $250,000/year for 

permissible transactions. 

https://www.rbi.org.in/SCRIPTS/BS_ViewMasDirections.aspx?id=1

0192

Enforcement and Penalties :ED's Role: The ED can impose 

penalties under FEMA and initiate asset confiscation under PMLA.

Compounding Option: iX Global could theoretically apply for 

compounding under Section 13, but the scale of violations (fraud, 

money laundering) likely disqualifies them. Criminal Prosecution: 

Promoters face Imprisonment under PMLA if convicted of money 

laundering and prem kumar gopal prasad sharma was the key person who handled illegal hawala channel for sending funds out of India.

Strategy India – STAB Division -4/2025 8

3. The Consumer Protection (Direct Selling) Rules, 2021:

(Published on 28 December 2021)

The company masqueraded as a direct-selling MLM company. However, it 

violated over 90% of the rules outlined in the Consumer Protection (Direct 

Selling) Rules, 2021, the Consumer Protection (e-commerce) Rules, 2020, 

and other relevant laws governing direct-selling MLM companies in India. It

operates as a pyramid scheme under the definition of the term as per the 

Consumer Protection (Direct Selling) Rules, 2021, which explicitly prohibits 

such schemes.

• It charged a joining fee and paid a commission to the subscribers to 

get new subscribers.

• It promoted 28-day subscriptions to subscribers and paid subscribers 

when the subscribers in their downline renewed their subscriptions.

Legal Implications for iX Global Under the Consumer Protection 

Framework: As described, IX Global’s operations violate multiple 

provisions under India's consumer protection framework, particularly 

the Consumer Protection (Direct Selling) Rules, 2021, and the 

Consumer Protection (E-Commerce) Rules, 2020. The company's 

structure as a pyramid scheme, its imposition of joining fees, and its 

recruitment-based compensation model directly contravene statutory 

mandates designed to protect consumers from fraudulent practices. 

Below is a detailed examination of the applicable legal provisions, 

enforcement mechanisms, and penalties.

Key Findings : iX Global’s MLM business model violates core 

provisions of India's consumer protection laws, including:

Pyramid Scheme Operations under Rule 4(1) of the Consumer 

Protection (Direct Selling) Rules, 2021.

a. Charging Joining Fees prohibited under Rule 4(17) of the 

Direct Selling Rules.

b. Unfair Trade Practices under Section 2(9) of the Consumer 

Protection Act, 2019.

c. Non-compliance with E-Commerce Transparency 

Requirements under the Consumer Protection (E-Commerce) 

Rules, 2020.

d. Fraudulent Misrepresentation under the Indian Penal Code 

(Section 420) and the Prize Chits and Money Circulation 

Schemes Act, 1978.

A. Violations Under the Consumer Protection (Direct Selling) Rules, 2021

https://consumeraffairs.nic.in/sites/default/files/232214.pdf

a. Rule 4(1): Prohibition of Pyramid and Money Circulation Schemes

Definition of Pyramid Scheme: Rule 2(l) defines a pyramid scheme as a multi-layered 

network where earnings depend on recruiting new participants rather than genuine 

product sales.

Application to IX Global: IX Global paid commissions to subscribers to recruit new 

members for their "downline," a hallmark of pyramid schemes. The company's Revenue 

model prioritised recruitment over product sales, violating the prohibition under Rule 

4(1 Strategy India – STAB Division -4/2025 9

b. Rule 4(17): Prohibition of Entry/Subscription Fees

Legal Mandate: Direct selling entities are barred from charging joining fees.

Application to IX Global: The company imposed a 28-day subscription fee on 

participants, which qualifies as an illegal entry fee under Rule 4(17).

c. Rule 5: Obligations of Direct Selling Entities

Written Contracts: Rule 5(1)(iv) mandates written agreements with direct sellers, 

ensuring transparency in terms.

d. Grievance Redressal: Rule 5(9) requires entities to establish mechanisms for 

resolving consumer complaints within one month. 

Application to IX Global: The absence of valid contracts and grievance redressal 

mechanisms indicates non-compliance.

e. Rule 7: Prohibition of Misleading Claims

Legal Mandate: Direct sellers must avoid false income promises or misrepresentation 

of product benefits.

Application to IX Global: Promises of daily returns (e.g., $50–$250/day) constitute 

misleading claims.

B. Violations Under the Consumer Protection (E-Commerce) Rules, 2020

a. Rule 4: Transparency and Fair Trade Practices: Product Information: 

E-commerce entities must disclose total prices, return policies, and 

seller details.

Application to IX Global: The company's official literature failed to 

provide accurate and complete information about the 28-day 

subscription fees and renewal terms.

b. Rule 5: Liability for Unfair Practices

Legal Mandate: Platforms must prevent false advertising and ensure 

genuine product quality.

Application to IX Global: Promoting algorithmic trading bots and 

NFTs as high-return investments qualifies as deceptive advertising.

C. Consumer Protection Act, 2019

a. Section 2(9): Unfair Trade Practices

Definition: Includes false representations, misleading advertisements, 

and non-compliance with consumer rights.

Application to IX Global: The company's recruitment-driven model 

and unrealistic income claims fall under unfair practices.

b. Section 89: Penalties

Fines and Imprisonment: Violations can lead to fines of up to ₹50 

lakh and Imprisonment of up to three years.

Application to IX Global: Given the scale of operations (e.g., ₹104.7 

crores collected for NFTs), penalties could exceed ₹100 crores

Strategy India – STAB Division -4/2025 10

Overlap with Other Legislations

A. Prize Chits and Money Circulation Schemes (Banning) Act, 1978: 

Section 3: Prohibits schemes where earnings depend on recruitment.

Application to IX Global: The company's referral-based commissions align with the 

definition of illegal money circulation.

B. Indian Penal Code (Section 420: Fraud) : Application: IX Global’s false 

promises of returns and subscription renewals constitute criminal fraud.

Conclusion and Recommendations : IX Global’s operations violate Rules 4(1), 4(17), 5, 

and 7 of the Consumer Protection (Direct Selling) Rules, 2021, alongside Sections 2(9) 

and 89 of the Consumer Protection Act, 2019. The company's pyramid structure, 

subscription fees, and recruitment incentives warrant stringent penalties, including:

• Immediate Cease-and-Desist Orders under Section 18 of the Consumer Protection 

Act.

• Confiscation of Assets linked to fraudulent gains under the PMLA, 2002.

• Criminal Prosecution of promoters under IPC Section 420.

• Compensation to Victims through the Consumer Dispute Redressal 

Commissions.

4. The Goods and Services Tax Act, 2017 : The company (GST 

Registration Number: 27AAFCI5678C1ZF (surrendered in March/April 

2023) presented itself as a direct-selling entity selling educational content. 

The company charged a registration/joining fee of US$50/115/145/180 and a 

28 renewal/subscription fee of US$50/115/145/180.

The "education" provided consisted of various individual recordings stored in 

the investors' Back Office. However, the company has not paid the applicable 

GST (State and Central) on the total money collected(for joining’s and 

subscriptions).

To avoid revealing its accurate turnover (collections from joining and 

renewals of subscriptions), the company generated virtual currency (referred 

to as "epins"), which were distributed to investors against their 

commissions/payouts rather than depositing money directly into their bank 

accounts and used mule accounts to collect money against joining fee and 

subscription fee. Investors who receive these epins use them to register/join 

and pay for new investors' subscriptions/renewals and pocket the cash.

Estimated Loss to the Exchequer:

• For the Year 2021 (at a US$22 million* turnover): Estimated loss of INR 32 

Crores.

• From 1 April 2022 to 13 October 2022 (at a US$100 million* turnover): 

Estimated loss of INR 149 Crores.

(These figures are calculated based on the turnover claimed by Joseph Anthony 

Martinez during a conference call).

Applicability of the Goods and Services Tax Act, 2017 to IX Global’s

Violations: As described, the operations of IX Global constitute systemic 

violations of India's Goods and Services Tax (GST) framework, engaging 

multiple provisions of the CGST/SGST Act, 2017. The company's use of virtual 

currency ("epins") and use of mule accounts to obscure turnover, failure to remit 

GST on subscription fees, and fraudulent invoicing practices warrant stringent

Strategy India – STAB Division -4/2025 11

penalties and prosecution. Below is a detailed examination of the applicable 

sections, enforcement mechanisms, and estimated fiscal impact.

Summary of Key Findings: IX Global’s violations engage Sections 122(1), 132, 

16(2), 24, and 35 of the CGST Act, 2017, alongside overlapping liabilities under 

the Prevention of Money Laundering Act (PMLA), 2002. The estimated GST 

evasion of ₹181 crores (2019–2022) triggers penalties exceeding ₹362 crores and 

potential Imprisonment for promoters.

A. Failure to Pay GST on Taxable Supplies (Section 122(1)(a))

Violation: IX Global collected subscription/joining fees (USD 50–180) but 

failed to remit GST to the government.

Legal Mandate: Under Section 122(1)(a), any person who "supplies goods or 

services without paying tax" faces a penalty of ₹10,000 or 100% of the tax 

evaded, whichever is higher.

The company's surrender of its GST registration (27AAFCI5678C1ZF) in 

2023 does not absolve prior liabilities.

Application: Estimated Evasion of ₹32 crores (2021) and ₹149 crores (2022) 

constitutes a "fraudulent" evasion under Section 122(1A), warranting a 100% 

penalty. The use of USD-denominated fees does not exempt GST liability, as 

transactions in foreign currency are taxable under Section 13(2) of the IGST 

Act.

B. Suppression of Turnover via Virtual Currency and accepting deposits in mule 

bank accounts (Section 122(1)(xv))

Violation: The company issued "epins" (virtual currency) to investors instead 

of cash to conceal actual Revenue.

Legal Mandate: Section 122(1)(xv) penalises "suppression of turnover 

leading to tax evasion" with a penalty of 100% of tax evaded.

Virtual currencies like "epins" qualify as "goods" under GST, making their 

issuance taxable.

Application: By substituting cash with epins, IX Global avoided recording 

₹181 crores in taxable Revenue, evading GST of 18% (₹32.58 crores). This 

constitutes deliberate suppression under Section 74 (fraudulent Evasion), 

attracting interest at 18% p.a. on unpaid tax.

C. Issuing Non-GST Compliant Invoices Without Supply of Services (Section 

122(1)(i))

Violation: The "educational content" was pre-recorded videos without 

genuine service delivery.

Legal Mandate: Section 122(1)(i) penalises "supplying goods/services 

without issuing an invoice or issuing a false invoice" with a penalty of 

₹10,000 or 100% of tax evaded.

Rule 13 of the CGST Rules mandates invoices for all taxable supplies

Strategy India – STAB Division -4/2025 12

Application: iX Global’s back-office recordings do not qualify as "services" 

under Section 2(102), as they lack live interaction or customised training.

False invoices for non-existent services trigger penalties under Section 

132(1)(a), punishable by up to 5 years’ imprisonment.

D. Fraudulent Input Tax Credit (ITC) Claims (Section 122(1)(vii))

Violation: The company likely claimed ITC on fake invoices for "epins" or 

virtual services.

Legal mandate: Section 122(1)(vii) penalises "availing ITC without actual 

receipt of goods/services" with a penalty of ₹10,000 or 100% of ITC claimed.

Application: Epins, as virtual goods, require valid tax invoices for ITC 

claims. IX Global’s failure to issue GST-compliant invoices for epins renders 

ITC claims (if done) fraudulent.

E. Failure to Maintain Records (Section 35)

Violation: iX Global did not maintain records of epins transactions or 

subscription fees.

Legal mandate: Section 35 requires businesses to retain records for 6 years. 

Non-compliance attracts penalties under Section 122(1)(xvi) of ₹25,000.

Application: The absence of epins transaction logs violates Section 35, 

compounding penalties for tax evasion.

F. Money Laundering via Epins (Section 132(1)(l))

Violation: Epins were used to layer funds and evade detection.

Legal mandate: Section 132(1)(l) criminalises "obstruction of tax authorities" 

via falsified records, punishable by up to 6 months' Imprisonment.

Application: Epins facilitated money laundering by disguising subscription 

fees as virtual currency transactions and engaging PMLA provisions.

Enforcement Recommendations

a. GST Department Actions:

• Issue demand notices under Section 73/74 for tax recovery with interest.

• Freeze bank accounts and attach properties under Section 83.

b. ED Coordination: Investigate epins as "proceeds of crime" under 

PMLA, leading to asset confiscation of the promoters and the 

primary beneficiaries.

Prosecution: File charges under Section 132 for non-bailable offences 

(tax evasion >₹5 crores).

Conclusion : IX Global’s operations violate Sections 122(1)(a), 

122(1)(xv), 132, and 35 of the CGST Act, with penalties exceeding 

₹729.16 crores (excluding interest). Using virtual currency to masking

Strategy India – STAB Division -4/2025 13

turnover represents a sophisticated tax evasion strategy, necessitating 

coordinated action by GST authorities and the ED.

5. The Income Tax Act 1961 : Pochen Global Services Pvt. Ltd. (formerly known as 

IX Academy Pvt. Ltd.): U80900MH2020PTC336900.The company started collecting funds 

from participants/subscribers in India in July/August 2019.

The company registered in India on 30 January 2020. The company's office address until June 

2023 was 2003 Spaces Inspire Hub, Adani Western Heights, J. P. Road, Ambivali, Andheri 

West, Mumbai, Maharashtra.

Auditors: AHSP & CO LLP (formerly known as Patel Palkar& Associates LLP), Chartered 

Accountants (Firm Registration Number - W100163). CA Siddhant Shah. Reported Revenue 

in ITRs for the years ending 31 March 2021 and 31 March 2022 was INR 304.89 Lacs (false) 

and INR 179.98 Lacs (false), respectively, contrary to the data provided in the bank 

statements(used by iX Global to collect funds) in the EOW Mumbai chargesheet.

Legal Implications for IX Global Under the Income Tax Act, 1961: The operations of IX

Global (operating as Pochen Global Services Pvt. Ltd.) constitute systemic violations of the 

Income Tax Act, 1961, engaging multiple provisions related to under-reporting, misreporting, 

falsification of records, and tax evasion. The company's discrepancies in reported income, 

pre-registration fund collection, and collusion with auditors warrant stringent penalties under 

Sections 270A, 271(1)(c), 271AAD, 276C, and 277 of the Act. Below is a detailed 

examination of the applicable sections, enforcement mechanisms, and fiscal impact.

Summary of Key Findings: IX Global’s actions violate core provisions of the Income Tax 

Act, including:

• Under-reporting of Income under Section 270A, with discrepancies exceeding ₹304.89 lakhs 

(FY 2021) and ₹179.98 lakhs (FY 2022).

• Concealment of Income under Section 271(1)(c), attracting penalties up to 300% of evaded 

tax.

• False Entries in Books under Section 271AAD, with penalties equal to the aggregate of false 

entries.

• Wilful Tax Evasion under Section 276C, punishable by Imprisonment.

• Falsification of Accounts under Section 277 implicates the company and its auditors.

A. Under-reporting and Misreporting of Income (Section 270A)

Violation: IX Global reported revenues of ₹304.89 lakhs (2021) and ₹179.98 

lakhs (2022) in its ITRs, starkly contradicting bank statement data cited in the 

EOW chargesheet.

Legal Mandate: Under-reporting (Section 270A(1)): Discrepancies between 

declared income and actual receipts attract a penalty of 50% of the tax due on 

under-reported income.

B. Misreporting (Section 270A(9)): Deliberate suppression of facts (e.g., preregistration collections from July 2019) qualifies as misreporting, triggering 

penalties of 200% of the tax due.

Application: The company began collecting funds in July 2019 but registered 

only in January 2020, suppressing income for 6 months

Strategy India – STAB Division -4/2025 14

Bank statements(including the ones of mule accounts) reveal actual 

collections far exceeding reported revenues, indicating systemic underreporting.

For misreporting (pre-registration collections), penalties could reach 200% of 

tax evaded.

C. Concealment of Income (Section 271(1)(c))

Violation: The company concealed income by falsifying ITRs and failing to 

disclose pre-registration fund collection.

Legal Mandate: Section 271(1)(c) penalises concealment or inaccurate 

particulars of income with fines of 100–300% of evaded tax.

Application: The EOW chargesheet highlights bank statement evidence of 

unreported collections, demonstrating deliberate concealment.

Auditors (AHSP & Co. LLP) may have colluded in certifying false ITRs, 

exacerbating liability.

Penalty: For FY 2021, assuming ₹3.04 crores concealed:

3×(3,048,900×0.3)=₹27,44,0103×(3,048,900×0.3)=₹27.44 Lacs.

D. False Entries in Books (Section 271AAD)

Violation: Discrepancies between ITR filings and bank statements indicate 

false entries or omissions in books.

Legal mandate: Section 271AAD imposes penalties equal to the aggregate 

amount of false entries.

Application: The company's ITRs omitted pre-registration collections (2019–

2020) and under-reported 2021–2022 revenues.

Virtual currency ("epins") used to mask transactions (as per prior violations) 

further constitutes false entries.

Penalty: Penalty = ₹3.04 crores (2021) + ₹1.79 crores (2022) = ₹4.83 crores.

E. Wilful Tax Evasion (Section 276C)

Violation: Intentional under-reporting to evade taxes.

Legal Mandate: Section 276C prescribes a Prison Term of 3 months to 2 

years (with a fine) for tax evasion exceeding ₹25 lakhs.

Application: Evasion of ₹3.04 crores (2021) and ₹1.79 crores (2022) exceeds 

thresholds, warranting criminal prosecution.

F. Falsification of Accounts (Section 277)

Violation: Submission of false ITRs and auditor certifications.

Legal Mandate: Section 277 penalises falsification with Imprisonment of up 

to 7 years and fines

Strategy India – STAB Division -4/2025 15

Application: Auditors (AHSP & Co. LLP) certified inaccurate ITRs, violating 

Section 278 (abetment).

Role of Auditor/s : AHSP & Co. LLP (FRN: W100163) and CA Siddhant 

Shah face liability under:

a. Section 278: Abetment of false filings, punishable equivalently to 

primary offenders.

b. Section 271J: Penalty of ₹10,000–₹50,000 for negligent audits.

Enforcement Recommendations

• Tax Department Actions: Issue demand notices for ₹4.83 crores (Section 

271AAD) + ₹27.44 lakhs (Section 271(1)(c)).

• Initiate prosecution under Sections 276C and 277.

• Auditor Accountability: Disciplinary action by ICAI under the Chartered 

Accountants Act, 1949.

• EOW Coordination: Confiscate assets under PMLA, 2002, for proceeds of crime.

Conclusion: IX Global’s violations engage Sections 270A, 271(1)(c), 

271AAD, 276C, and 277 of the Income Tax Act, with total penalties 

exceeding ₹5.3 crores and criminal liability for promoters.

The operations of iX Global constitute a large-scale financial scam involving violations across 

multiple legal frameworks—SEBI Act, BUDSA, FEMA, GST Act, Income Tax Act, Consumer 

Protection Rules, and PMLA. Immediate coordinated action by relevant authorities is essential to 

prosecute the perpetrators, recover siphoned funds, compensate victims, and safeguard public interest 

against such fraudulent schemes. 

(Key findings confirm that the statutes and sections referenced align with the described activities, 

though nuanced interpretations may arise in enforcement.

Strategy India – STAB Division -4/2025 16

Citations:

1. Securities and Exchange Board of India (SEBI) Act, 1992

• Section 11AA – Definition of Collective Investment Scheme

• SEBI Act, 1992 – Section 11AA

2. Banning of Unregulated Deposit Schemes Act, 2019 (BUDSA)

• Sections 3, 5, 21(3), 23, 25(1) – Prohibition, wrongful inducement, punishment, and liability

• BUDSA, 2019 (Full Text)

3. Foreign Exchange Management Act, 1999 (FEMA)

• Sections 3, 4, 8, 10, 13, 37A – Prohibitions, restrictions, penalties, and confiscation

• FEMA, 1999 (Full Text)

4. Consumer Protection (Direct Selling) Rules, 2021

• Rules 4(1), 4(17), 5, 7 – Prohibition of pyramid schemes, joining fees, obligations, and 

misleading claims

• Consumer Protection (Direct Selling) Rules, 2021 (Official Notification)

5. Consumer Protection Act, 2019

• Sections 2(9), 89 – Unfair trade practices and penalties

• Consumer Protection Act, 2019 (Full Text)

6. Prize Chits and Money Circulation Schemes (Banning) Act, 1978

• Section 3 – Prohibition of money circulation schemes

• Prize Chits and Money Circulation Schemes (Banning) Act, 1978

7. Indian Penal Code, 1860

• Section 420 – Cheating and dishonestly inducing delivery of property

• Indian Penal Code, 1860 (Section 420)

8. Goods and Services Tax (GST) Act, 2017

• Sections 122(1)(a), 122(1)(xv), 122(1)(i), 122(1)(vii), 132, 35 – Penalties, offences, and 

record-keeping

• Central Goods and Services Tax Act, 2017 (Full Text)

9. Income Tax Act, 1961

• Sections 270A, 271(1)(c), 271AAD, 276C, 277 – Penalties for under-reporting, concealment, 

false entries, evasion, and falsification

• Income Tax Act, 1961 (Full Text)

10. Prevention of Money Laundering Act, 2002 (PMLA)

• Section 3 – Offence of money laundering

• PMLA, 2002 (Full Text)

11. Reserve Bank of India (RBI) Directions

• Electronic Trading Platform (ETP) Directions, 2018

RBI ETP Directions, 2018

• Liberalised Remittance Scheme (LRS)

RBI LRS Master Directions

12. Companies Act, 2013

• General compliance and registration requirements

• Companies Act, 2013 (Full Text