The Comptroller and Auditor General of India (CAG) has criticised the income tax authorities for missing loopholes in assessments of corporation tax and personal income for the past two years. It reportedly found irregularities in 340 high-value cases concerning corporate tax with the effect of Rs 4,866 crore.
A report presented in the Parliament on 30 July 2019 on direct tax for 2018-2019 suggested that the Indian Government should focus on placing the information technology system for direct tax by CBDT along with an independent government organisation.
CAG said that there were arithmetical mistakes in calculating income and tax, errors in levy of interest, incorrect allowance of capital losses, depreciation, and business expenditure.
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The government body also audited 6,778 cases, of which 1,527 cases (22.5%) claimed exemptions on agricultural income, allowed without any adequate verification of documents. It also found that land records were unavailable for 716 cases (10.6%) and 1,270 cases (18.7%) did not have proof of agricultural income and expense invoices such as ledger accounts and bills.
CAG recommended that the income tax department should re-examine cases where income has been allowed as agriculture income exceeding a specific threshold. This will ensure that exemptions are given to eligible assesses with accurate supporting documents.
The Comptroller and Auditor General of India also pointed out that out of 3,133 audit cases checked in nine states; there were mismatches in 48 cases regarding the exemptions allowed in the assessment reflected in the IT department’s database.
The agricultural income in the database reflected irrelevant figures, where the income allowed was different from that claimed by the assessee.
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