Ministry of Finance

Income Tax Department conducts Search on a “wellness group” in Chennai

Dated: 18^th OCT 2019

On 16.10.2019, the Income Tax Department conducted search action under the Income-tax Act, 1961 in the case of a conglomerate of trusts and companies that run year-round “wellness courses” and training programmes in philosophy, spirituality, etc at various sprawling residential campuses in Varadaiahpalem in Andhra Pradesh (AP), and also in Chennai and Bengaluru.

The group which was founded by a spiritual guru in the 1980s with “oneness” philosophy has also diversified into several sectors including real estate, construction, sports, etc in India and abroad. The group is presently managed and controlled by the spiritual leader who laid the foundation of the group, and his son. The courses attract residential customers from abroad and the group earns substantial receipts in foreign exchange. There was intelligence that the group has been suppressing its receipts which are ploughed into investment in huge tracts of landed property in AP and Tamil Nadu (TN) and also in investments abroad. The search action which is still in progress has covered about 40 premises located in Chennai, Hyderabad, Bengaluru and Varadaiahpalem.

During the search proceedings, evidence has been found that the group has been regularly suppressing its receipts at its various centres or ashrams. Evidence has been found with key employees who maintained record of cash collections that were kept outside the accounts for use in making investments elsewhere and also for paying for properties over and above documented values. It is learnt that the group also earned unaccounted income in receiving cash from property sales over and above documented values. A preliminary estimate of such unaccounted cash receipts is Rs 409 crore from FY 2014-15 onwards. Such unaccounted cash receipts are also evidenced by huge quantities of cash and other valuables found at the residences of the founder and his son, and at one of the campuses. A total sum of cash of Rs 43.9 crore has been found and seized by the Department at these premises.

Apart from the above, substantial sums of foreign currencies have also been found and seized. The total of such foreign exchange found at these premises is about $2.5 million which amounts to approximately Rs 18 crore. Foreign exchange in other currencies has also been found and seized. Substantial quantities of undisclosed gold in the form of jewellery, about 88 kg approximately valued at over Rs 26 crore, has also been found and seized. Undisclosed diamonds amounting to 1,271 carats valued approximately at about Rs 5 crore were also found and seized. Total value of seizure so far is approximately Rs 93 crore. The undisclosed income of the group detected so far is estimated at more than Rs 500 crore. The search proceedings are still in progress.

An important finding of the search is that the group has been investing in a number of companies in India and abroad, including in tax havens. Some of these companies based in China, USA, Singapore, UAE, etc are found to be receiving payments from foreign clients who attend the various residential “wellness” courses offered in India. The Department is investigating into diversion of income taxable in India to offshore entities by the group in this process. Further, it is found that one of the group trusts may be providing accommodation entries for other parties by receiving donations from them and then returning the money back under the garb of expenses and receiving a small percentage as fee. Instances have also been found where the group is not accounting for money received from foreign clients in cash in foreign currency and then exchanging the same in the grey market. All these leads are being pursued and investigation is in progress.

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RM/KMN

(Release ID: 1588457)

 

 

Ministry of Finance

Income Tax Department conducts searches on business group in Goa

Dated: 12 OCT 2019

The Income Tax Department carried out search operation on 10th October 2019 covering six premises of two groups involved in the sale-purchase of hotel resort at Goa.

One of the groups covered currently owns a large property at Goa on which a 5 star resort project is being built. The group is engaged primarily in hotels & hospitality, real estate and construction. The buyer, a Delhi Based group of companies is into catering, restaurant and hotel business.

Search operations have been concluded. The search resulted in  seizure of undisclosed  assets of Rs 4.39 crore comprising undisclosed cash of Rs 2.55 crore and jewellery/valuables worth Rs 1.84 crore.The group made a disclosure of a total amount of Rs 124.41 crore representing undisclosed income and also committed to pay taxes immediately.

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RM/KMN

(Release ID: 1587948)

 

Ministry of Finance

Income Tax Department conducts searches on coaching institutes in Namakkal, Tamil Nadu

Dated: 12 OCT 2019

The Income Tax Department, conducted a search action on 11th October, 2019 in the case of a business group based in Namakkal, Tamil Nadu. The group is mainly into running of educational institutions, and coaching institutes for competitive exams like NEET, etc. The group comprises several partnership firms and a trust controlled by a closely knit group of individuals. The search action covered 17 premises including residential premises of the group's promoters. The premises are located in Namakkal, Perundurai, Karur and Chennai in Tamil Nadu.

The search was undertaken on the basis of intelligence that the group was indulging in substantial tax evasion by suppression of fee receipts received from students. The modus operandi was to receive part of the fees in cash and such cash receipts were invariably not entered in the regular books of accounts. Instead, such receipts were maintained in separate set of accounts. Incriminating evidence of such suppression of receipts has been found during the search in the form of accounts maintained in diaries, in electronic storage devices and also in the form of huge sums of unaccounted cash. It was found that cash was kept in lockers in banks in the names of employees who acted as benami or name lenders.

Significant amount of cash was found in a safe inside an auditorium in the main school premises. Unaccounted cash of about Rs 30 crore has been found and seized. The unaccounted receipts are deployed for acquiring immovable properties as personal investments which are then leased for long term to the trust for expanding to other towns. It was also found that highly priced faculty are hired and employed in the coaching institutes and they are paid outside the books. Based on preliminary findings, the undisclosed income of the group is estimated at more than Rs 150 crore. The search is still in progress.

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RM/KMN

(Release ID: 1587925)

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Dated: 11th October, 2019

PRESS RELEASE

Income Tax Department conducts searches in Karnataka

                The Income Tax Department conducted search on 9th October 2019 on a prominent business group in Karnataka which runs multiple educational institutions. During the course of the search, the modus operandi of conversion of seats which were originally to be allotted by merit through counselling by MCC maliciously into institutional quota seats through dropout system has been unearthed.

Incriminating evidence has been found in the search, substantiating conversion of seats, commission payments to brokers and sale of seats in exchange of receipt of cash. Evidences of use of multiple agents for conversion of MBBS and PG seats have also been found. Diversion of funds in the form of payment of on-money for the purpose of purchase of immovable assets for the benefit of trustees has also been established including finding of cash in possession of seller, commission in the hands of broker and strong written and audio evidences found in possession of the concerned parties. Evidences of handling of such cash generated, diversion for construction of hotels have also been found. Hawala transactions relating to movement of such cash have also been established. A total of Rs.4.22 crore of unaccounted cash has so far been found including Rs.89 lakh in the house of the main trustee.

Certain students whose names were used in conversion of seats have made statements establishing the modus operandi. Agents have admitted to have aided in sale of seats, brokers have admitted to be witness and accomplice to diversion of such cash generated.

Modus operandi of making cash deposits in the accounts of certain employees & their families and diversion of them to fixed deposits which are used to services loans taken by trustees has been unearthed. Evidence has further brought to light the fact that trustees have opened bank accounts in the names of their employees to deposit some of the capitation fee received in cash. Fixed deposits amounting to Rs. 4.6 crore in the names of 8 employees made in the above manner have been seized. It was further found that the interest from such benami fixed deposits have been used to service the loans taken by the trustees in their personal capacity.

Evidences also reveal undisclosed investments in real estate. Overall the total undisclosed income detected so far is around Rs.100 crore considering the cash donations received for 185 seats averaging Rs.50 lakh to Rs.65 lakh per seat and total seizure of undisclosed assets of Rs. 8.82 crore. Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

 

Press Information Bureau
Government of India
Ministry of Finance

Dated: 07 OCT 2019

Revenue Secretary inaugurates National e-Assessment Centre of IT Department

 

Revenue Secretary Shri Ajay Bhushan Pandey inaugurated National e-Assessment Scheme (NeAC) here today in the presence of CBDT Chairman Shri P.C. Mody and Members Shri P.K. Das, Shri Akhilesh Ranjan and Shri Prabhash Shankar.

While inaugurating the NeAC, Shri Pandey said that it is matter of great pride and achievement for the Income Tax Department to bring NeAC to life in a small span of time. Retracing the origins of NeAC in 2017, Shri Pandey lauded the IT Department for striving to achieve transparency with speed.

Shri Pandey said that with the launch of National e-Assessment Centre (NeAC), the Income Tax Department will usher in a paradigm shift in its working by introducing faceless e-assessment to impart greater efficiency, transparency and accountability in the assessment process. He said that with NeAC, there would be no physical interface between the tax payers and the tax officers.

The setting up of NeAC of the Income Tax Department is a momentous step towards the larger objectives of better taxpayer service, reduction of taxpayer grievances in line with Prime Minister’s vision of ‘Digital India’ and promotion of Ease of Doing Business.

In the first phase, the Income Tax Department has selected 58,322 cases for scrutiny under the faceless e-Assessment Scheme 2019 and the e-notices have been served before 30th of September 2019 for the cases of Assessment Year 2018-19.

The taxpayers have been advised to check their registered e-filing accounts/ email ids and have been requested to furnish reply within 15 days. The Department hopes that with the ease of compliance for taxpayers, the cases would be disposed off expeditiously.

Benefits of Faceless Assessment:

• NeAC eliminates human interface between Assessing Officer and Assessee
• New System optimises the utilisation of resources through economies of scale
• NeAC introduces team based assessment with dynamic jurisdiction
• Ease of compliance for taxpayers
• Brings transparency and efficiency, thus improves quality of assessment and monitoring
• Functional specialisation as only one agency dealing with faceless assessment
• Expeditious disposal of cases
• Standardisation and quality management

About National e-Assessment Centre (NeAC) :

NeAC will be an independent office that will look after the work of e-Assessment scheme which is recently notified for faceless e-assessment for income tax payers. There would be a NeAC in Delhi to be headed by Principal Chief Commissioner of Income Tax (Pr.CCIT). There are 8 Regional e-Assessment Centres (ReAC) set up at Delhi, Mumbai, Chennai, Kolkata Ahmedabad, Pune, Bengaluru and Hyderabad which would comprise Assessment unit, Review unit, Technical unit and Verification units. Each ReAC will be headed by Chief Commissioner of Income Tax (CCIT). Cases for the specified work shall be assigned by the NeAC to different units by way of automated allocation systems. In view of the dynamic and all India jurisdiction of all officers of NeAC and ReAC, this kind of connective and collaborative effort of officers is likely to lead to better quality of assessments.

About Faceless e-Assessment: 

Centre Government had recently notified e-Assessment scheme to facilitate faceless assessment of income tax returns through completely electronic communication between tax officials and tax payers.

Under the new system of faceless e-Assessment, tax payers will receive notices on their registered emails as well as on registered accounts on the web portal www.incometaxindiaefiling.gov.in with real time alert by way of SMS on their registered mobile number, specifying the issues for which their cases have been selected for scrutiny. The replies to the notices can be prepared at ease by the tax payers at their own residence or office and be sent by email to the National e-Assessment Centre by uploading the same on the designated web portal.

This new initiative of faceless assessment is expected to increase ease of compliance for taxpayers as the cost and anxiety of taxpayers are likely to be greatly reduced. No human interface with the Department would be a game changer. This is another initiative by CBDT in the field of ease of compliance for our tax payers.

LINK: PPT Presentation for detailed information

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RM/KMN