Income Tax Raids on Various Medical Colleges in Bengaluru

The Income Tax Department has detected an alleged cash-for-seat scam running in some Karnataka-based medical colleges, as the CBDT said in the press release.

The raid has resulted in the discovery of incriminating evidence of cash-for-seat malpractice for admission to MBBS, BDS, and Post Graduate seats in the form of notebooks, handwritten diaries, excel sheets containing descriptions of cash earned for admission to these colleges for different years from students and brokers.

The raid was conducted at 56 different locations across Karnataka and Kerala.

The scam involved tweaking the screening process through the National Eligibility cum Entrance Test (NEET) exam to the medical colleges.

The trustees, the main staff running the medical schools, agents/brokers, and some students who topped the NEET exams were the people involved in this fraud.

How medical colleges scam NEET, sell seats to underachievers?

The first stage of the malpractice is that certain high-ranking students in the NEET exam are admitted to the MBBS courses by state counselling, thus blocking medical college seats during the counselling process, later offering the service of converting normal seats to management seats.

Subsequently, these students withdraw from the admission process, leaving vacancies open to the management of the institution. Such seats shall be made available to the college management for filling by means of the “Stray Vacancies Round”

In this round, the seats are filled by the college administration by accepting less meritorious candidates (low rank in NEET) after receiving large amounts of money as a cash capitation fee/gifts that are illegal.

Also, there is information suggesting that one of the medical colleges has some kind of “package arrangement” for passing management quota students in written examination and viva for a fixed amount ranging from Rs 1 lakh to Rs 2 lakh.

Here are the key findings of the raid:

The information obtained reveals that by exploiting the online admission process, Rs 402.78 crore.

Gold Jewelry of 81 kg, 50-carat diamonds, and 40 kg of silver items have been found in the trustees’ residences.

Proof of hidden foreign assets of Rs. 2.39 crore in Ghana has also been identified

Significant investments in 35 luxury cars in Benami names.

There is evidence that indicates that the cash money earned by exploiting the online admission process in these colleges was used by the Trustees for non-charitable reasons, which explicitly violates Sec 12AA of the Income Tax Act, 1961, CBDT said.

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