CAG Points out Mistakes in Hassan Ali's IT Assessment
IN its latest report to Parliament, the CAG states, “ We had pointed out in Para 1.8 of Audit Report no. 4 of 2009-10 that in 2008-09 out of Rs 2 lakh crore that had remained uncollected, one group namely Hassan Ali alone accounted for Rs 71,874 crore of uncollected demand. We found mistakes in assessments of the same group of high risk assessees. There were two cases of short levy of tax of Rs. 3,369.6 crore and three cases of overcharge of tax of Rs. 304.9 crore. The Department has taken remedial action in all the five cases.
Hassan Ali Khan filed returns in February 2007 consequent to search action initiated against him. While computing his tax liability for the assessment years, the Department levied interest of Rs. 706.1 crore instead of Rs. 4,056 crore for default in furnishing of returns and of Rs. 10,033.3 crore instead of Rs. 9,756.9 crore for default in payment of advance tax. Further, while computing tax liability for the AY 2001-02, Rs. 69.5 crore was added back instead of Rs. 69.5 lakh on account of commission income and consulting fees earned by assessee. These mistakes resulted in short levy of interest of Rs. 3,349.9 crore under section 234A; excess levy of interest of Rs. 276.4 crore under section 234B and excess levy of tax ofRs. 24.1 crore respectively”.