The society, which has five branches across Bengaluru, allegedly turned depositors into members of the society first, with an admission fee.
"It was noticed that whoever approached the organization for making the deposits, was first made a member of the society for a nominal admission fee. Subsequently, members could make time deposits, purchase cash certificate, operate the savings account, among others," said the I-T department report.
In a tie-up with a nationalised bank, the members could also do electronic fund transfers and issue bearer cheques.
However, the organisation did not accept PAN numbers of depositors or comply with statutory regulations. It did not even deduct TDS on interest payments to account holders.
"The department is verifying such deposits. Preliminary investigations indicate that a substantial part of the deposits are from undisclosed sources," the report said.
Further investigation involves probing into the organisation's CEO's alleged involvement in running an unregistered chit fund with the help of family members.
(With inputs from PTI)
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