CAG pulls up I-T Dept for non-recovery of Rs 4,500 cr tax dues

The CAG has pulled up the Income Tax (I-T) Department for not recovering tax arrears worth over Rs 4,500 crore from various entities due to a lack of coordination between two of its wings.

The government auditor, in its latest report tabled in Parliament, said it "found several cases where the Assessing Officers (AOs) did not communicate updated information relating to demands to Tax Recovery Officers (TROs)."

"We noticed 1,54,198 cases involving outstanding demands of Rs 4,543.83 crore where the demand was not transferred to the TROs inspite of non-recovery for more than one year," the Comptroller and Auditor General's (CAG) report said.

The report on 'recovery of arrears of tax demand' also "noticed instances of non-disposal of arrear cases and differences in the figures of arrear demand in the books of the AOs versus TROs due to the lack of coordination between them."

Accordingly, the CAG has recommended that the Finance Ministry "may consider working out appropriate modalities for improving the liaison between AOs and TROs under supervision of the higher authorities to ensure better coordination and speedy disposal of cases.""The AO may ensure timely transfer of the undisputed cases of unrealised demand to the TRO," it added.

Calling TROs the "most important functionary" in monitoring and recovery of I-T arrear demands, the CAG also asked the Central Board of Direct Taxes (CBDT) to make the roles of TROs independent from that of AOs.