NEW DELHI: The Income-Tax (I-T) department has no mechanism in place to ensure that all the registered real estate companies have Permanent Account Numbers and are filing their I-T Returns (ITR) regularly, leaving 95 per cent of developers outside the I-T net, said a Comptroller and Auditor General (CAG) report.
“There is no mechanism with ITD (I-T Department) to ensure that all the registered companies have PAN and are filing their ITRs regularly,” the CAG report pointed out, adding that this leaves several companies outside the tax net.
“RoCs did not have information about PAN in respect of 51,670 (95 per cent) of a total of 54,578 companies for which data was made available to Audit,” the CAG report said. “It was difficult for Audit to ascertain from the information obtained from RoCs whether these companies were in the tax net of the ITD or not except in case of Andhra Pradesh & Telangana where Audit could identify PAN in respect of 147 of these companies,” CAG revealed in the report. The report titled ‘Assessment of Assesses in Real Estate Sector’ was tabled on Tuesday.
“Out of a total of 78,647 assessments made in the period by the Department, we checked 17,155 assessment records (approximately 22 per cent) with assessed income of Rs 1,02,106 crore during this performance audit. We noticed 1,183 mistakes (approximately 7 per cent of the audited sample) having tax effect of Rs 6,093.71 crore, thus causing loss of revenue to the Government,” the report said, adding that it’s the tip of the iceberg.
“Since a sample of 22 per cent has yielded errors of Rs 6,093.71 crore, the department needs to have the remaining 61,492 cases audited internally,” the CAG pointed out.
The report also punctuated the problem with housing for Economically Weaker Sections. “The purpose of providing deduction under Section 80-IB (10) for better availability of housing for EWS and LIG sections... was not being met to the extent that the prices of dwelling units were out of reach of these target groups,” it said.