Income Tax Department Conduct Searches on 25 Premises of Educational Institution

The Income Tax Department carried out a search and seizure operation on 14.03.2022 on a popular chain of educational institutes, running several schools and colleges at multiple locations in India and abroad. The search operation covered more than 25 premises spread over locations in Maharashtra, Karnataka and Tamil Nadu.

Several incriminating evidences, including hard copy documents and digital data, were discovered and seized during the search, revealing that substantial funds were siphoned-off from the Trusts for the personal benefit of the group’s promoters and their family members, in violation of provisions relating to the Trusts’ claim of exemption under the Income-tax Act of 1961.

The modus operandi of siphoning-off the funds from the Trusts includes debiting of bogus expenses in the guise of purchase of goods/services from various dummy companies and LLPs owned by the promoters, their family members, and some of their trusted employees. It was unearthed that no actual goods/services were delivered/ rendered by these entities and the same have been corroborated by the employees in their deposition. The money so siphoned-off has been utilised for investment in acquiring benami properties and making unfair payments.

During the investigation, evidences of roughly two dozen immovable properties in Maharashtra, Pondicherry, and Tamil Nadu were gathered, which are either benami properties or were not mentioned in the relevant income tax reports. These properties are now subject to a provisional attachment.

The search also turned up evidence of Hundi borrowings totaling Rs.55 crore, and their payback in cash in the form of discharged Promissory Notes/Bills of Exchange, which were discovered and seized.

The search resulted in the seizure of Rs.27 lakh in undeclared cash and Rs.3.90 crore in jewellery.

More research is being conducted.