Income Tax Raids Reveal Major Fraud in Haryana and Delhi-NCR Healthcare Sector

Income Tax Department Conducts Searches on Healthcare Provider Groups in Haryana and Delhi-NCR

On July 27, 2022, the Income Tax Department executed search and seizure operations at multiple healthcare service groups operating hospitals in the Delhi-NCR region. A total of 44 premises were inspected during this operation.

Key Findings from the Search Operations

During the extensive search, significant amounts of incriminating physical and digital evidence were confiscated. Analysis of this evidence uncovered that one of the groups was maintaining parallel sets of books, indicating a systematic under-reporting of cash receipts from patients.

• The group's modus operandi involved:
  • Removal of invoices
  • Deflation of invoice amounts labeled as “Discounts” or “Concessions” at the time of patient discharge.

This practice facilitated income evasion across the group's hospitals and spanned multiple years.

Evidence Against Other Healthcare Groups

Other groups investigated during the search were found to be involved in fraudulent activities, including the procurement of either bogus or inflated invoices for pharmaceuticals and medical devices, such as stents. This not only suppressed their actual profits but also resulted in overcharging patients.

• Key points regarding these findings include:
  • A money trail indicating that these groups received cash in return for payments made through banking channels for the fraudulent invoices.
  • One hospital was also identified as claiming improper deductions for several years, failing to meet the eligibility criteria for a specified business.

Referral Payments and Benami Transactions

Further evidence indicated the practice of referral payments made to doctors and clinics without proper documentation in their financial records. The referral payments were based on a percentage of the invoices issued to patients. Investigators also uncovered evidence of benami transactions during the search.

Seizures and Current Status

The operations resulted in the seizure of unexplained cash exceeding Rs. 3.5 crore and jewellery valued at Rs. 10 crore. The estimated unaccounted income of all groups involved is projected to exceed Rs. 150 crore. Additionally, over 30 bank lockers have been placed under restraint as part of this investigation.