In a sweeping action against suspected tax evasion and misuse of corporate donations, the Income Tax Investigation Unit, Agra, has carried out search operations at over 30 locations across six states since August 19. The raids, conducted under the direction of the Principal Director of Income Tax (Investigation), Kanpur, span Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, West Bengal and Madhya Pradesh.
Senior tax officials confirmed that the searches are still underway and have already uncovered large-scale irregularities in the use of Corporate Social Responsibility (CSR) funds mandated under Section 135 of the Companies Act, 2013. Preliminary findings point to tax evasion worth several crores.
Bogus Foreign Remittances Worth Rs 10,000 Crore
Investigators also unearthed evidence suggesting bogus outward remittances exceeding Rs 10,000 crore routed to foreign jurisdictions such as Hong Kong, Singapore, Malaysia, and China. Officials indicated that these transactions were disguised as legitimate expenses but were linked to a wider network of money laundering and fund siphoning.
CSR Funds Siphoned Through NGOs
According to officials, three Non-Profit Organisations (NPOs) have come under particular scrutiny:
- Jan Jagriti Sevarth Sansthan (Mathura, Uttar Pradesh)
- Dr. Brajmohan Sapoot Kala Sanskriti Seva Sansthan (Bhilwara, Rajasthan)
- Raginiben Bipinchandra Sevakarya Trust (Ahmedabad, Gujarat)
These organisations allegedly diverted and misused more than Rs 800 crore of CSR donations. Although the NGOs claimed to work in education, health, employment generation, and social welfare, investigators found no substantial charitable activities on the ground.
National Crackdown on CSR Abuse
The crackdown highlights growing concerns about the misuse of CSR donations by shell NGOs, which act as conduits for tax evasion and illegal fund transfers abroad. The ongoing probe is expected to bring further revelations in the coming days, with officials indicating that the scale of evasion could be much larger.
Tax authorities are likely to pursue prosecution and initiate recovery actions against the trusts and their associates, while also tightening oversight mechanisms for CSR spending and foreign remittances routed through the non-profit sector.
CAclubindia
