Colleges took Rs 402 crore in illegal fees, says I-T dept

BENGALURU: The Income Tax Department on Thursday said that their search and seizure operation on nine major trusts which are running educational institutions, including medical colleges in Bengaluru and Mangaluru, has unearthed acceptance of illegal capitation fees to the tune of Rs 402.78 crore and also investments in foreign nations.A release by the department through the Press Information Bureau says that so far, the evidence gathered indicates that money has been accepted as illegal capitation fees by manipulating the online admission process and this has not been disclosed to the department.

The search operation at 56 locations across Karnataka and Kerala on Wednesday, according to the statement, has uncovered evidence of cash-for-seat malpractices in admission to MBBS, BDS and post-graduate courses in the form of notebooks, hand-written diaries, Excel sheets containing details of cash received from students/brokers for admission in these colleges for various years.

“It was also observed that the management, faculty, staff, meritorious students and brokers are working in close nexus to manipulate the online admission process,” the statement said. The officials found that the 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.

The college managements were admitting less meritorious candidates after collecting huge sums as capitation fee/donations in cash which are illegal under the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act,1984, the statement said. The department also found evidence indicating that one of the medical colleges has some sort of “package arrangement” for passing management quota students in written examination and viva-voce for sums ranging from Rs 1 lakh to Rs 2 lakh.

The colleges had also diverted the cash collected for non-charitable purposes by the trustees. Many had made huge investments in immovable properties with huge cash component. One of the colleges has reportedly diversified into the business of timber/plywood industry and has undisclosed foreign assets too. 
“Searches have resulted in seizure of cash amounting to Rs 15.09 crore. Gold jewellery 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 foreign assets of Rs 2.39 crore in Ghana has also been found apart from evidence of huge investments in 35 luxury cars in benami names,” the statement said.