Income Tax Department Surveys Delhi-NCR Educational Trusts For Alleged Fund Diversion

The Income Tax Department on Tuesday conducted a survey action against an educational trust run by the KR Mangalam Group, which operates several schools and colleges in Delhi-NCR. The trust allegedly misused tax exemptions and diverted substantial funds for the personal benefit of its promoters.

The tax department is also reviewing donations received by the trust over the years. Other educational trusts are reportedly under scrutiny for similar issues.

The survey comes during the admission season, when most schools and colleges begin their admission processes for the next academic year. "The survey action is still underway and might be concluded by Wednesday," a source familiar with the matter told NDTV Profit.

KR Mangalam Group did not immediately respond to a request for comment by NDTV Profit.

The action involved multiple premises linked to the group’s promoters in Delhi-NCR. Various digital documents were examined as part of the investigation. "Since the action is still underway, the total quantum of tax evasion is still being examined," a source said.

Preliminary assessments suggest that significant funds were siphoned off from the trust for the personal benefit of the group’s promoters and their family members, the source said, adding that this violates provisions under the Income Tax Act that govern exemptions for trusts.

Documents indicate bogus expenses were recorded for goods and services allegedly procured from shell firms linked to the promoters, with no evidence of actual goods being purchased or used, the source said.

To address such practices, the government has tightened tax regulations for trusts, including those operating in the educational and religious sectors. Further action against other trusts is expected in the coming weeks.