The Central Board of Direct Taxes (CBDT) said the evidence indicated that the embezzled money could run into hundreds of crores.

Cash being seized from a bag
news Income Tax Saturday, November 07, 2020 - 08:08

The Income Tax department raided various properties of Kerala-based Believers Eastern Church, for allegedly siphoning off crores of money that it received from abroad as donations for the poor. The Central Board of Direct Taxes (CBDT) conducted the raids on 66 institutions linked to the church in Tamil Nadu, Telangana Karnataka, West Bengal, Chandigarh, and Punjab on Thursday. On Friday, the CBDT said that the ‘self-styled’ evangelist of the church, based in Kerala’s Thiruvalla, had channelled the donations ( ) into real-estate and personal investments. While the statement of CBDT did not identify the specific group of trusts, the I-T department sources identified it as the Believer's Eastern Church. 

KP Yohannan is the Metropolitan Bishop of Believers Eastern Church. As per the CBDT statement, KP Yohannan, “a well-known self-styled evangelist” and his group of various trusts enjoy exemption under the Income Tax Act of 1961 as charitable or religious trusts. The church operates many institutions, including Believers Church Medical College Hospital and Believers Church Residential School in Thiruvalla.

The searches were carried out as CBDT received information that the group has received donations from foreign countries for helping the poor and the homeless people, and for evangelical purposes, but was allegedly siphoning off such tax-exempted funds in cash for unaccounted cash transactions for personal and other illegal expenses in real estate transactions. It also added that there is evidence indicating that the embezzlement could run up to hundreds of crores.

After the raid on Thursday, a total of Rs 6 crore was recovered, including Rs 3.85 crore from a place of worship in Delhi, CBDT said. The agency has also seized electronic devices that are also being examined now. 

The Church operates about 30 trusts registered across the country, but CBDT found that most of them "exist only on paper and have been found to be used for routing unaccounted funds and for accommodation (hawala) transactions."

The search has led to the unearthing of a number of real estate transactions involving unaccounted cash payments. Related documents such as sale agreements have been seized. The group has also inflated the price in real estate transactions to show the money received in donations is being spent on the activities of the trusts, CBDT said.

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