Income Tax Department Uncovers Major Financial Irregularities in Bindal Paper Mills Group
The Meerut unit of the Ghaziabad investigation wing has successfully concluded an extensive search and seizure operation under Section 132 of the Income Tax Act, 1961. This large-scale action specifically targeted Bindal Paper Mills Limited (BPML) and its numerous associated entities across multiple locations.
Widespread Raids Across Delhi, Muzaffarnagar, and Bijnor
The coordinated raids commenced on Wednesday and spanned numerous premises in Delhi, Muzaffarnagar, and Bijnor. Pankaj Agarwal, Managing Director of Bindals Duplex Ltd and President of the UP Papermill Association, confirmed the operation to Times of India. "Approximately 30 to 35 premises belonging to Bindal Paper Mills Ltd were raided on Wednesday. The scope of the raid expanded to include units directly or indirectly associated with the group. We cannot comment on the specific reasons behind the IT department's actions, as this remains a matter of ongoing investigation," Agarwal stated.
According to officials from the investigation wing, the operation extended beyond BPML to encompass six other major paper mills in the Muzaffarnagar region:
- Bindals Duplex Ltd
- Agarwal Duplex Board Mills Ltd
- Tehri Pulp and Paper Mills Ltd
- Sakumbhari Pulp and Paper Mills Ltd
- Bindal Industries Ltd
Additionally, the group's sugar unit located in Changipur, Bijnor, underwent intense scrutiny during the raids.
Substantial Seizures and Uncovered Scam
The raids yielded significant financial discoveries, including:
- Unaccounted cash exceeding ₹3 crore
- Jewelry valued at more than ₹20 crore
- Documentation for over 50 immovable properties
Officials revealed that a large-scale procurement scam involving raw materials was unearthed during the investigation. Evidence indicates unaccounted purchases of bagasse and other essential raw materials. Furthermore, investigators detected bogus purchases surpassing ₹50 crore specifically within the paper segment, according to sources familiar with the matter.
Wrongful Deduction Claims Under Scrutiny
A major focal point of the investigation centers on alleged wrongful claims of deductions totaling ₹171.3 crore under Section 80IA of the Income Tax Act. Statements recorded under Section 132(4) from BPML's internal accountant and the General Manager of the power plant have revealed critical information. The group failed to maintain separate books of account for their paper, power, and sugar units, creating significant irregularities in financial reporting.
Transition to Post-Search Investigation Phase
While the active search phase concluded on Wednesday, the Income Tax Department has now transitioned into the post-search investigation stage. The recording of statements from employees and directors continues as authorities work to comprehensively map the full extent of the financial irregularities discovered during the operation.
This investigation represents one of the most significant actions against paper industry entities in recent years, highlighting the department's intensified focus on corporate tax compliance and financial transparency within industrial sectors.
