97.3 pc of Rs 8.24 lakh crore tax arrears difficult to recover

Income tax arrears totalled Rs 8.24 lakh crore at end-March 2016 of which 97.3 per cent was difficult to recover.
These observations were made by the Comptroller and Auditor General of India (CAG) in a report tabled in Parliament today.
"The arrears of demand increased from Rs 7 lakh crore in 2014-15 to Rs 8.24 lakh crore in 2015-16. The Revenue Department indicated that more than 97.3 per cent of arrears of demand is difficult to recover in 2015-16," the report said.
The factors responsible for non-recovery of the arrears include, "inadequate assets for recovery, cases under liquidation/BIFR, assessee not traceable, demands stayed by various authorities", it said.

The report also noted that the appeals pending with Commissioner of Income Tax (Appeal) increased from 2.32 lakh in 2014-15 to 2.59 lakh in 2015-16 and the amount locked up in these cases was Rs 5.16 lakh crore.
The Income Tax department recovered Rs 525.68 crore during 2015-16 on the basis of observations pointed out by the audit.

The report has pointed out 320 high value cases pertaining to corporation tax with tax effect of Rs 3,298.93 crore and 136 high value cases relating to income tax and seven cases of wealth tax involving tax effect of Rs 461.17 crore.

The apex auditor further said there was "no interface" between 'Assessment Information System' and 'Central Processing Centre' for accessing demand/refund information.
"Information available with Assessing Officer was not used in processing of Income Tax returns (ITRs) and there was no linking of previous years' ITRs which resulted in excess deduction," the report said.
Another CAG report tabled in Parliament recommended to the Revenue Department that the CBDT may ensure sharing of information among TDS units and respective jurisdictional assessment units so that revenue efforts are synergised.
It also said the CBDT should prescribe a procedure and criteria for selection of TDS returns for verification.

The CAG also suggested the inadequacies in the 'KYC' and without sufficient 'KYC' the ITD may not issue TAN so as to keep track of tax defaulters.