income tax
On October 16, 2019, the Income Tax Department executed a search operation under the Income-tax Act, 1961 targeting a conglomerate of trusts and companies that conduct year-round wellness courses and training programs focused on philosophy and spirituality. The group's extensive operations span multiple residential campuses located in Varadaiahpalem, Andhra Pradesh, as well as in Chennai and Bangalore. Established in the 1980s by a spiritual guru advocating the philosophy of "oneness," the group has since diversified into various sectors, including real estate, construction, and sports, both in India and internationally. Currently, the group is managed by its founding spiritual leader and his son.
The wellness courses attract international clientele, generating substantial foreign exchange receipts. However, intelligence reports suggested that the group has been underreporting its income. These hidden revenues have reportedly been invested in extensive properties across Andhra Pradesh and Tamil Nadu, along with investments abroad. The search operation, which is ongoing, has so far encompassed approximately 40 locations in cities including Chennai, Hyderabad, Bangalore, and Varadaiahpalem.
Evidence gathered during the searches indicates a pattern of income suppression at the group’s various ashrams. Key employees provided information about cash collections that were kept off the books, with funds being allocated for investments and for acquiring properties at values exceeding their recorded amounts. Additionally, the group is suspected of having received unaccounted income from property transactions that surpassed the documented sale prices. A preliminary estimate indicates unaccounted cash receipts amounting to ₹409 crore since the fiscal year 2014-15. The search revealed significant cash reserves, totaling ₹43.9 crore, discovered at the residences of the founder and his son, as well as at one of the campuses.
The operation also uncovered substantial amounts of foreign currency, amounting to approximately $2.5 million (around ₹18 crore). In addition, undisclosed gold, approximately 88 kg valued at over ₹26 crore, and diamonds totaling 1,271 carats worth about ₹5 crore were seized. The cumulative value of the assets seized thus far is approximately ₹93 crore, and the total undisclosed income identified is estimated to exceed ₹500 crore. The investigation remains ongoing.
A notable discovery during the searches indicates that the group has invested in several companies in India and offshore jurisdictions, including entities in tax havens like China, the USA, Singapore, and the UAE. These companies are allegedly receiving payments from foreign clients participating in the group’s wellness courses. The Department is examining potential income diversion from India to these offshore entities.
Further, evidence suggests one of the group’s trusts may be facilitating accommodation entries for third parties by accepting donations and then reimbursing the funds under the pretense of expenses, receiving a minor percentage as a fee in return. Instances of receiving cash payments from foreign clients, which were exchanged in the grey market, have also been identified. Investigations into these matters are currently ongoing.