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The income tax department has ordered a special audit of the accounts of Commonwealth Organising Committee after detecting multiple violations of procedures. A detailed analysis of books of accounts was required to ascertain the extent of non-compliance by the committee, a tax department official told to media. A special audit is conducted by the income tax authorities if accounts of any assessee is found to be inaccurate under provisions of the Income Tax Act. Under the provision an assessing officer “in the interest of revenue” can order a special audit of the accounts.

The department had detected non compliance with the procedures required for tax exemption enjoyed by the organising committee.

The Commonwealth Games, which were held in the national capital over October 3 – October 14, were marred by allegations of shoddy work and large-scale corruption in the grant of contracts.

The special audit has been ordered after Organising Committee Commonwealth Games 2010 Delhi’s response to the show-cause notice failed to satisfy income tax authorities . The OC is registered as a society under the Societies Registration Act 1860 and claims income tax exemption . The audit will look at any misuse of the income or property of the institution for the benefit of its founders, managers, functionaries.

The committee can lose its tax exempt status if any misuse is confirmed in the audit. Income tax department’s initial investigation of the books for the assessment year 2008-09 has revealed misuse of the office by some office bearers and non-compliance with the provisions.

The income tax department is carrying a detailed probe in the whole commonwealth games saga that covers not just the OC but a number of functionaries associated with it. Tax authorities have already conducted raids on contractors and firms at 60 locations across the country in connection with alleged irregularities in games contracts. The enforcement directorate is also investigating the role of vendors for charges of overinvoicing of contracts.

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May 2024