Income Tax Department spends Rs 790 Cr on Computerisation - CAG not happy with results
THE main objectives of the IT Applications in Income Tax Department (ITD) were to improve the efficiency and effectiveness of the tax administration and provide management with reliable and timely information towards effective planning as also broaden the tax base.
ITD has spent Rs. 790 crore on computerisation during FY 06 to FY 11. Yet ITD has not utilized important functionalities of modules. AST/CPC applications do not link up assessee's legacy details. It does not record scrutiny assessment details nor does it record penalty proceedings and appeals. All non filers identified by AST are not being issued notices. ITD did not reconcile the revenue collections as reported by Banks and as accounted by Zonal Accounts Office, with implications on correctness of Government Accounts. De-authorised bank branches are collecting taxes. Large amounts of un-posted credits are lying in OLTAS. The Individual Running ledger Accounts are not being populated completely. Multiple uses of same Challans have been found which accorded inadmissible tax credit to assessees. ITD has already confirmed 3089 cases amounting to Rs. 153 crores of extra credit through the system at our instance. IT applications do not generate important MIS reports like CAP-I and CAP-II online; and, do not co-relate Certificate for deduction of tax at lower/nil rate while processing returns.
These are the observations of the CAG in his latest report to Parliament on computerisation in the Income Tax Department.
And CAG Recommends:
Efficient and effective management of audited ITD system”
1. Database be adequately utilized towards broadening the tax base.
2. Tax payment details in different modules be linked more reliably.
3. Adequate system checks be provided against multiple erroneous credits for the same Challan.
4. Comprehensive recording of all transactions be ensured to achieve optimum benefits of computerization initiatives.
5. Legacy issues of assessments be factored in the system for summary processing; and basic linkages regarding unabsorbed depreciation, carry forward of losses etc. ensured.
6. Results of scrutiny assessments as post transaction events be recorded.
7. NSDL claim of 90 percent data accuracy with regards to the data uploaded by banks be reconciled with ITD's averment that challans cannot be posted into IRLA due to poor quality of challan data.
8. Chain of tax collection and reporting be strengthened.
9. Linkages amongst IT modules, viz. OLTAS, AST, e-TDS and IRLA be strengthened.
10. Information be adequately populated in IRLA.
11. Correctness of lower deduction/no deduction claimed in TDS returns be verified through eTDS application.
Outsourcing and vendor management:
12. Vendor performance be monitored and their contractual obligations enforced.
13. Outsourced activities be monitored periodically to ensure achievement of business objectives.
14. Conditions relating to security audit be enforced.
15. Comprehensive provisions be made in contracts for digitisation for ensuring security and confidentiality of information.
16. Comprehensive password, physical and logical access controls be ensured.