The Income Tax arrears of demand has increased from Rs 11 lakh crore in 2017-18 to Rs 12.3 lakh crore in 2018-19 of which 99% of the demand would be difficult to recover, according to the Comptroller and Auditor General which has tabled a report on direct taxes in Parliament on Wednesday.
“The net collectible demand decreased to Rs 14,593 crore in FY 2018-19 as compared to Rs 20,159 crore in FY 2017-18 due to increase in demand difficult to recover. The (I-T) Department indicated that more than 98.8% of uncollected demand would be difficult to recover,” the CAG said in its report.
The auditor observed that the number of appeals pending with Commissioner I-T (Appeals) increased from three lakh in financial year (FY) 2017-18 to 3.4 lakh in FY 2018-19. The amount locked up in these cases was Rs 5.6 lakh crore, CAG noted.
The total cases pending at higher levels (ITATs/High Courts/Supreme Court) increased from 82,000 cases in FY 2017-18 to 1.35 lakh in FY 2018-19.
The auditor has reviewed 2.72 lakh out of 2.99 lakh cases taken up by the I-T department for scrutiny during 2017-18. It has also audited 60,000 cases of scrutiny assessments completed in the earlier financial years. It found an incidence of errors in assessments checked in audit at 6% (19,768 cases), as against 6.45% last year.
“There have been persistent and pervasive irregularities in respect of Corporation Tax and Income Tax assessments cases over the years. Recurrence of such irregularities, despite being pointed out repeatedly in the earlier Audit reports point to structural weaknesses on the part of the Department as well as the absence of appropriate institutional mechanisms to address this,” CAG has noted.