New Delhi: The Comptroller and Auditor General of India (CAG) reported on Monday that the income tax department has recovered ₹3,588.79 crore from demands raised to rectify errors in assessments identified during audits. However, as of February 28 this year, a staggering 59,352 cases flagged in the audit up to March 31, 2023, remain unresolved due to a lack of responses from the department.
The CAG’s report for 2022-23 highlighted that these unresolved cases pertain primarily to corporation tax, amounting to a significant tax effect of ₹6,252.06 crore.
Taxes
These cases mainly involve errors in the imposition of interest, irregularities related to depreciation allowances, business losses, incorrect allowances for business expenditures, unexplained investments, and even arithmetical mistakes in income and tax computations.
Additionally, the report identified 194 high-value cases associated with income tax, featuring a tax effect of ₹1,677.15 crore. Although the department has begun actions to rectify the cases highlighted by the audit, the CAG noted that the probability of errors—whether omissions or commissions—may still occur across all cases, including those not subjected to scrutiny.
To address these issues, the report emphasizes that the Central Board of Direct Taxes (CBDT) must not only reassess the completed evaluations from the preceding year but also implement a robust IT system and internal control mechanisms to prevent the recurrence of such errors in the future.
