IT Department Raids on Delhi-NCR Healthcare Service Provider; Detects Unexplained Income Rs.150 Crore

The Income Tax Department carried out search and seizure operations on 27.07.2022 on several groups engaged in healthcare services by running hospitals. A total of 44 premises were covered during the search action in Delhi-NCR.

Huge amounts of incriminating physical and digital evidence have been recovered during the search operation.

Evidence analysis showed that one of the groups was keeping a parallel set of accounting records, indicating a deliberate under-reporting of cash revenues from patients. When patients were being discharged from the hospital, this group’s mode of operation included removing invoices or deflating the invoice amount by designating them as “Discounts/Concessions,” etc. This practice, which results in income avoidance, is used at all of the group’s hospitals and spans a number of years.

It was discovered that the other healthcare organizations included in the search operation were involved in acquiring false or inflated invoices for pharmaceutical products and/or medical devices like stents, which not only suppressed true profits but also overcharged patients. Further evidence that the groups have been receiving cash in lieu of payments made through banking channels for these fictitious/inflated invoices has been provided by the money trail discovered during the investigations. One of these hospitals was also discovered to have throughout the years claimed the incorrect deductions while failing to meet the requirements for the hospital to qualify as a defined business.

The evidence that was obtained also showed that referral payments were made to clinics and doctors without being properly recorded in the books of accounts. The referral bonus is set at a set percentage of the patient invoices. During the search operation, evidence relating to benami transactions was also found.

The search operation has led to the seizure of unaccounted cash of over Rs.3.50 crore and jewellery valued at Rs. 10.00 crore. So far, the unaccounted income of all the groups detected in these operations, is estimated to be more than Rs. 150 crore. More than 30 bank lockers have been put under restraint.

Further investigations are in progress.