Chennai / IT dept raids NEET coaching institute in Tamil Nadu, seizes ₹30cr cash

Income Tax sleuths seized Rs 30 crore worth unaccounted cash from a well known private educational institution in Namakkal town in Tamil Nadu, offering coaching for NEET, during a statewide crackdown on coaching institutes since Friday.

Disclosing the seizure, tax authorities said on Saturday that the undisclosed income through tax evasion by the business group based in Namakkal, 390 km from Chennai, was estimated at Rs 150 crore.

The crackdown comes close on the heels of the raids carried out in Karnataka at medical colleges run by a trust belonging to Congress leader G Parameshwara, the former Deputy Chief Minister and others.

Simultaneous raids were carried out on the premises of the group across the state, which primarily runs educational institutions and coaching institutes for competitive examinations, mainly for the National Eligibility cum Entrance Test for MBBS admissions.

“The search covered 17 premises of the group’s promoters, located in Namakkal, Perundurai, Karur and Chennai,” the Central Board of Direct Taxes said in a statement. The raids followed intelligence inputs that the group was indulging in substantial tax evasion by suppression of fee receipts received from students, it added.

On the seizure of Rs 30 crore, the CDBT said, “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.”

According to the statement, the group comprised several partnership firms and a trust controlled by a closely knit group of individuals.

“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 a separate set of accounts,” the CBDT said. Further, during the searches, incriminating evidence of such suppression of receipts was found in diaries and electronic storing devices. Cash was also found kept in bank lockers in the names of employees who acted as benami or name lenders.

The unaccounted receipts, the statement said were deployed for acquiring immovable properties as personal investment which was then leased on long term to the trust for expansion in other towns. Further, it was also found that while hiring highly priced faculty for the coaching institutes, salary for them was paid outside the books, the CBDT said.

This development comes close on the heels of the NEET impersonation scam that has rattled the state. So far five medical students have been arrested for clearing NEET by engaging impersonators. The parents of four of them have also been arrested.

Meanwhile, opposition DMK president MK Stalin took to Twitter to blame NEET as a conspiracy to filter the poor out of medical education. The party has been leading the crusade against NEET and demands its scrapping.

“The corrupt and tax evaders are making illegal profits from NEET while aspirants and their parents continue to suffer under this broken system. The IT search shows that only the rich can afford NEET preparation and proves our claim that NEET discriminates against the poor,” his tweet said.