The income tax department will independently probe into the fictitious applications filed by the owners of multiple demat and bank accounts who have tried to corner large chunks of public issues including those of Yes Bank [Get Quote] and Infrastructure Development Finance Company [Get Quote].

Finance ministry officials said the income tax department will investigate the source of funds of the multiple account holders as some of them were benami in nature. Income tax offices in the west zone were being asked to look into these accounts.

"People have been using benami accounts for various purposes. This is illegal because fictitious names have been used for transactions and the account holders have given an undertaking on the authenticity of information supplied by them," officials said.

Officials said the tax department would try to ascertain if the taxes had been paid by the account holders.

"In all probability, no taxes have been paid by them," officials said.

They also said that the other wings of the finance ministry, like the banking division, would co-ordinate with the Reserve Bank of India [Get Quote].

Officials said the practice of applying for shares under names of family members or under fictitious addresses was common but the present cases had caught the attention of the regulators and the government as the vigilance level had improved.

However, for the moment, the scope of the tax investigation is confined to those who have come under the scrutiny of the financial sector regulators.