Have centralised monitoring for audit objections: CAG to CBDT

Government auditor CAG has suggested to the Central Board of Direct Taxes to introduce centralised monitoring mechanism to timely deal with the internal audit objections.
"CBDT may consider introducing centralised monitoring mechanism to watch timely issue of Internal Audit objections and Internal Audit Reports to ensure effective control," CAG said in a report tabled in Parliament today.
Out of 7,00,398 cases assigned, Internal Audit examined only 5,73,457 cases resulting in shortfall in coverage of 1,26,941 cases, it said.
Audit could not ascertain whether there is any quality control mechanism in place to prevent raising of prima-facie incorrect or repetitive objections, it said.

Inadequate follow up of Internal Audit objections resulted in time barring of 1,553 cases involving tax effect of Rs 392.65 crore in 11 CsIT (Audit) charges.
Intra-Departmental Meetings were not held for follow-up and settlement of internal audit objections, it noted.

It also suggested that the CBDT may consider revising the scope of assessment in recent years in order to ensure internal audit of high risk assessment units such as Large Taxpayers Units, International Taxation Units including Transfer Pricing Offices etc.
The Comptroller & Auditor General of India (CAG) carried out a performance audit on 'Functioning of Internal Audit in Income Tax Department'.

The study was carried out from September-December 2014, and the findings were discussed with CBDT in June this year.