I-T raids at Karnataka medical colleges unearth ‘cash for seat’ scam, Rs 402 cr found

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The Income-Tax (I-T) division raids at a number of medical colleges throughout Karnataka Wednesday have found malpractices in admissions to MBBS, BDS, and PG programs. I-T sleuths additionally found over Rs 400 crore unaccounted money within the title of capitation price, officers mentioned Thursday night. Nine main trusts, registered in Bengaluru and Mangaluru, operating academic institutes, together with medical colleges, have been raided.

Cash amounting to Rs. 15.09 crore, gold jewelry of 81 kg (valued at Rs. 30 crore), 50 carat diamonds and 40 kg of silver articles have been found from the residential premises of the trustees and are prime facie, unexplained. Evidence of undisclosed overseas belongings of Rs 2.39 crore in Ghana has additionally been found other than proof of giant investments in 35 luxurious vehicles in benami names.

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The residences of trustees of a number of medical colleges and hospitals in Bengaluru, Tumakuru, Davangere, and Mangaluru have been additionally searched Wednesday.

“Searches were conducted at 56 different locations across Karnataka and Kerala… it was found that transparent selection process to Medical colleges through NEET has been subverted by trustees and key persons running these Medical Colleges in collusion with agents/brokers and some students who got high ranks in NEET Examination… thereby blocking seats in the medical stream in a medical college during the Karnataka Examinations Authority (KEA) counselling process, in connivance with agents, middlemen, converters (who provide service of converting the regular seats to management seats),” a press release by the Central Board of Direct Taxes (CBDT) mentioned.

Such seats are made accessible to the school administration for filling up by way of the “stray vacancies round” (seats remaining vacant or unfilled in a university after a mop-up spherical), the CBDT mentioned. In this spherical, the assertion added, the seats are crammed by the school administration by admitting much less meritorious candidates (low rank in NEET) after amassing enormous sums as capitation price, donations in money that are unlawful below the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984.

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“The capitation fee/donations are collected through a network of brokers/agents employed by the key persons/trustees of these medical colleges,” the assertion mentioned. The CBDT mentioned “the search operation resulted in detecting incriminating evidence regarding cash-for-seat malpractices for admission to MBBS, BDS and PG seats in the form of notebooks, handwritten diaries, excel sheets containing the details of cash received from students/brokers for admission in these colleges for various years”.

It added that there’s proof indicating that one of many medical colleges have some type of ‘package arrangement’ for passing administration quota college students in written examination and viva voce for a hard and fast sum starting from Rs 1 lakh to Rs 2 lakh.

“There is proof which prima facie means that the money cash accepted by manipulating the web admission course of in these colleges has been diverted for non-charitable functions by the trustees, which is clearly in violation of Section 12AA of the Income Tax Act, 1961.

“Apart from this, evidence has been found regarding a large number of investments made in immovable properties with huge cash component attracting provisions of Section 69 (unexplained deposits) of the Income Tax Act, 1961,” the CBDT alleged.

It added that one of many colleges has diversified into the enterprise of timber/plywood industries the place proof concerning below invoicing has additionally been found. “So far, the evidence gathered indicates that Rs. 402.78 crore has been accepted as illegal capitation fees by manipulating the online admission process and the same has not been disclosed to the Income Tax Department,” launch added.

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