Continuous rise in pendency of refund claims cost the exchequer interest of a whopping Rs 5,785 crore during 2008-09, the Comptroller and Auditor General of India said today.
“A decade of computerisation by the Income Tax department has gone by but the pendency rate of refund claims is on rise…we recommend that the department identify the gaps in automation,” CAG said in a report on Income Tax Refunds tabled in Parliament.
During the four years from 2005-06 to 2008-09 reviewed by CAG for income tax refunds processed, the apex auditor said that it found procedural irregularities in refunds aggregating Rs 5,803.5 crore, the tax effect of erroneous refunds being Rs 135.8 crore.
The auditor also found that the timeliness in processing of refunds is much longer than international standards which range from 24 days to six weeks. “Our analysis showed that the average time taken for processing of refund claims leading to issue of refund vouchers is 10 month. The average time taken for the assessee to receive the refund voucher after its issue is 40 days,” CAG said.
“Along-nurtured racket of officers and staff of all levels in the department, who enjoy protection of the topmost in the hierarchy of powers. And, in addition, this racket is a main, permanently secure and the safest source of income not only for officers but also of the unions/union leaders.- It is true as stated by Rabatan.Several Lakh of rupees were invested to capture ITEF seats. For what? Only to general illegal money & power to bargain with administration.
The intervention of the CAG in the area of the menace of refusal to issue income tax refunds for ages or only against huge bribes is very rather belated, and nothing still certainly will come out of these findings and observations which are not at all novel either. In fact, the real reasons of this is public knowledge.
In this connection, I would like to invite the kind attention of your readers, the CBDT and the CAG (in the rare hope of their watching this website for enlightenment about the pulse of the common people) to the recent post on 11 May under the title: “IT department asked to find shortcoming in Income Tax refund issue Process” and the comments on that topic.
Also relevant in this context are the posts inter alia under the titles: Delay in Income Tax refunds trouble tax payers most, Pending tax cases are holding back more then Rs 64,000 cr, Income tax refunds may get delayed by a fortnight, Income Tax department strategy to meet the Financial Year 2009-2010 Budget target, Assessee can ask the reason for delay in Income Tax Return under RTI : CIC/Information on income tax can be disclosed under RTI, Central Board of Direct Taxes sought report on “income- tax refund scam,
“CBI alleged involvement of I-T officials and the NSDL staff in fraudulent I-T refund scam”, Electronic Clearing System of the Income Tax Department hacked: Hacker Diverted around Rs 15 crore; CBI asked to investigate, Fraudsters siphoned off About Rs 4 crore from Income Tax Department as I-T refunds, Make Income Tax procedures people-friendly: Opposition, &c.
While the CAG delving into the murky and filthy field of deliberately and consciously delayed (and hence denied) refund of excess taxes paid/deducted at source is welcome, it is ultimately the question of breaking a long-nurtured racket of officers and staff of all levels in the department, who enjoy protection of the topmost in the hierarchy of powers. And, in addition, this racket is a main, permanently secure and the safest source of income not only for officers but also of the unions/union leaders. Thus, to even take up the matter of finally killing this dangerous virus needs political will. This is not merely because the CBDT is also a party to this, but also because political patronage and bureaucratic support have been nurturing this poison-plant ever since its seed was sown.
It is common public knowledge that, in the entire department and all over the country, the annual general transfers/postings of staff are in reality done (or as dictated) by the unions and not by the officer in charge of administration. This is not strange as the transfers and postings of all officers in all ranks are also done not as per written guidelines but through money-power.
In this backdrop, the CAG, with the constitutional authority and power as this high and exalted office is vested with, alone can stem this poison from its root. Because, any government is a factor of political events/compulsions, being made up a motley crowd of different parties though each clamouring for power. But CAG being a creature of the Constitution, it would be possible for this office to take up cudgels with strong forces running this racket for decades, though there were press reports in November, 2009 about “Stench of graft in CAG office”.
It may be mentioned here that, excepting the very powerful corporates with very wide political clout and kingmaking powers, and some VVIP people, not one single tax payer can ever harbour the idea of asking with impunity for interest on delayed refunds-the department simply bulldozes such audacious and impertinent tax payers.
And that also happens to be public knowledge.
But, all said and done, and whatever it is, let the CAG be at least vested with the administrative and controlling powers over the working of the non-functioning (but expensive) outfit of “Income Tax Ombudsman”. let the Hon’ble CAG start with the new incumbent as Ombudsman in Delhi for purpose of a sample study! Since only very powerful officers with the proven record of incompetence and money-making power alone are selected for these posts, the CAG can also think of operating its own grievance cell for IT refunds.
It is mainly because of the corrupt income tax officials who knowingly don’t issue the refund on time. They wait for the assesse to come to them for the refund. And then they ask for money for issuing the refund. No surprise, everyone has to suffer b’coz of this. The assesse has to face the undue harrasment and the govt. suffers undue interest.
The processing time is 10 months? CAG is living in a fool’s paradise. Major refunds are only processed close to the date when processing u/s 143(1) is getting time barred. And the period of actual payment of refund? Only heavens know. The interest on refunds is usually pocketed by the officials releasing the refund. Its a big scam.