The Income Tax Department charged the Dainik Bhaskar newspaper company on Saturday with evading tax on Rs 700 crore in income during a six-year period. On Thursday, the tax agency raided numerous offices of the media conglomerate around the country, sparking widespread condemnation from the press and opposition politicians.
The disastrous impacts of the second wave of Covid-19 in India were widely documented by Dainik Bhaskar. The publication has slammed the Centre’s vaccination claims and reported on deaths that were undercounted, bodies floating in the Ganga river, and deaths caused by oxygen shortages. The news organization claimed that the government was afraid of its reporting.
The Income Tax Department said in a statement on Saturday that the media conglomerate was running multiple businesses in the names of its workers, “which have been utilized for recording fraudulent costs and routing of cash.”
According to the IT department, businesses registered in the names of workers were also utilized to drain earnings from the listed companies. The nature of such false expenditures booked, for example, ranges from the provision of labor to transportation, logistics, and civil works, as well as fictitious trade payables, according to the department.
It added: “The quantum of income escapement using this modus operandi, detected so far, amounts to Rs 700 crore spread over a period of 6 years. However, the quantum may be more as the group has used multiple layers and investigations are being carried out to unravel the entire money trail.”
The IT department also claimed to have found that the group was violating the Securities and Exchange Board of India’s rules for listed companies. “Application of Benami Transaction Prohibition Act will also be examined,” the department added.
“Cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of Rs 2,200 crore has been found,” it said. “The inquiries have confirmed that these have been fictitious transactions without any actual movement or delivery of goods. The tax effect and violation of other laws is being examined.”
