The Income Tax Department, in its investigation, found that huge amounts of funds of an educational trust were embezzled for the personal benefit of its promoters. The group that owns this trust has many schools and colleges in the country and abroad. The Central Board of Direct Taxes (CBDT) on Thursday said that over 25 premises of the group were raided in Maharashtra, Karnataka and Tamil Nadu on March 14.
The CBDT said in a statement that the raid was conducted against a popular chain of educational institutions. The group operates several schools and colleges in India and abroad. The investigation found that a large amount of trust funds were siphoned off for the personal benefit of the promoters of the group and their families. All this was done in violation of the exemption rules given to the trust under the Income Tax Act. During the raid, 27 lakh undeclared cash and jewelery worth Rs 3.90 crore were seized.
It has been claimed in the statement that under the modus operandi adopted for embezzlement from the funds of the trust, money was taken from various dummy companies by showing fake bills for the purchase of goods and services. Investigation revealed that no goods or services were actually procured from these companies or others. The embezzled money was used for purchase of benami property and improper payment.
More than two dozen immovable properties purchased in Maharashtra, Puducherry and Tamil Nadu have also been traced. These are either benami properties or they have not been mentioned in the income tax return. The raids showed evidence of borrowing of Rs 55 crore on hundi (an illegal form of trade and credit transaction) and their payment in cash, including discharged promissory notes, promissory notes issued and bills of exchange. These have also been confiscated.