New Delhi: The Income-tax department has raided multiple premises of a self-styled evangelist from Kerala that allegedly "siphoned off" tax exempted funds and donations received from abroad for the poor and channeled them into real estate and personal investments, the CBDT said on Friday. The searches were carried out on Thursday at66 premises in states like Kerala, Tamil Nadu, West Bengal, Karnataka, Chandigarh, Punjab and Telangana.
The action was carried out, the CBDT said in a statement, of a well-known self-styled evangelist of Thiruvalla (Kerala) and his group of various trusts that enjoy exemption under the I-T Act of 1961 as charitable or religious trusts. While the statement did not identify the group, I-T department sources identified it as the Believer's eastern church.
"The group operates places of worship, a number of schools and colleges across the country, a medical college and a hospital in Kerala," the statement said. The Central Board of Direct Taxes (CBDT) is the administrative authority for the tax department.
It said "unexplained cash of about 6 crore has also been found during the raids including Rs 3.85 crore in a place of worship in Delhi." "Substantial electronic computing and data storage has been found, which is being examined," the CBDT said. The Board said the searches were carried out as "credible information was received that the group has received donations from foreign countries ostensibly for helping the poor and the destitute and for evangelical purposes but was actually siphoning out such tax-exempted funds in cash to engage in unaccounted cash transactions for personal and other illegal expenses in real estate transactions." It said the Thiruvalla-based group operates about 30 trusts, registered across the country, and most of them "exist only on paper and have been found to be used for routing unaccounted funds and for accommodation (hawala) transactions." "It has been found that the modus operandi of the group is to systematically inflate expenses with the help of other parties who would return the inflated amount in cash through domestic hawala channels to the functionaries of the group," it said.
"Some of these other parties were also covered in the search action," it said. During the raids, it said, evidences have been found of "systematic inflation of expenses in purchase of consumables, construction expenses, real estate development expenses, payment of salary, etc." "The search has led to unearthing of a number of real estate transactions involving unaccounted cash payments.Related documents such as sale agreements, etc have been seized. The group has also inflated the price in real estate transactions to show as if the money received in donations is being spent on the activities of the trusts," it said.
"The evidence found so far indicate that the siphoning of funds in cash may be running into hundreds of crores of rupees," it added.