CAG pulls up chartered accountants for tweaking income tax information
20 Dec 2014 1:20 AM GMT
Coming down heavily on chartered accountants hired by the income tax department, a CAG report on Friday said their failure to submit correct tax information resulted in levying of lower taxes by as much as Rs 2,813.11 crore in 367 cases surveyed.
“We found cases where the CAs failed to report full and correct information in 367 cases leading to short levy of taxes of Rs 2,813.11 crore and where the Assessment Officers failed to utilise the information available in 102 reports or certificates submitted to them leading to short levy of taxes of Rs 1,310.05 crore,” said the report of the official auditor.
“We also found in another 616 cases where CAs committed mistakes viz in allowance of exemption or deductions, charging of tax on book profit under Section 115JB, adoption of arm’s length price and reporting on cash payments exceeding Rs 20,000 per day,” it said.
The performance audit covered assessments completed during the period from financial years 2010-11 to 2012-13 and up to the date of audit. In case of major audit observations, it said assessment records of previous assessment years (AYs) were also linked wherever found necessary.
“We found that 18.87 per cent of CAs (12,435 CAs) for 2013-14 issued more tax audit reports than prescribed by ICAI. We also got cases where CAs did not mention their membership numbers,” it said. Income tax department did not refer any case for professional negligence to ICAI for taking action against erring CAs, it said. The report also said that CAs failed to give correct information relating to allowance of depreciation in 66 cases involving short levy of tax of Rs 457.79 crore.
“We found cases where the CAs failed to report full and correct information in 367 cases leading to short levy of taxes of Rs 2,813.11 crore and where the Assessment Officers failed to utilise the information available in 102 reports or certificates submitted to them leading to short levy of taxes of Rs 1,310.05 crore,” said the report of the official auditor.
“We also found in another 616 cases where CAs committed mistakes viz in allowance of exemption or deductions, charging of tax on book profit under Section 115JB, adoption of arm’s length price and reporting on cash payments exceeding Rs 20,000 per day,” it said.
The performance audit covered assessments completed during the period from financial years 2010-11 to 2012-13 and up to the date of audit. In case of major audit observations, it said assessment records of previous assessment years (AYs) were also linked wherever found necessary.
“We found that 18.87 per cent of CAs (12,435 CAs) for 2013-14 issued more tax audit reports than prescribed by ICAI. We also got cases where CAs did not mention their membership numbers,” it said. Income tax department did not refer any case for professional negligence to ICAI for taking action against erring CAs, it said. The report also said that CAs failed to give correct information relating to allowance of depreciation in 66 cases involving short levy of tax of Rs 457.79 crore.
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