CBDT has no information on refunds – CIC asks for written submissions from CBDT Chairman
In yesterday's CobWeb , we commented,
“Let's take the case income tax unclaimed refund. In case of income tax, refund cheques are issued out of current receipts. And what goes to the revenue kitty is only the net receipts. But out of the n-number of refund cheques issued, if thousands of them come back undelivered, that money goes into the suspense account only in terms of entry and the money remains with the bank which earns profit on that and does not pay interest on such sum. Even the CBDT is least bothered about such sums. And it continues for a decade and then most statistics gets messed up for anybody to know and inquire about.”
Under the RTI Act, a citizen asked the Income Tax Department the following information.
1. Number of returns filed during the period from 01-04-2003 to 30-09-2007.
2. Number of refund claims out of sl.1 above.
3. Number of refunds issued within four months of filing of returns as at sl.2.
4. Number of refunds issued after four months of filing of return as at sl.2.
5. Amount of refunds issued as at sl.4.
6. Amount of interest granted on delayed refunds at sl.5.
All very pertinent questions of national importance. But the Income Tax Department, coolly told the Commission that such information was not maintained in the regular course of business and they were not in a position to state the actual status of income tax refunds as these might have been claimed by assessees. [So they don't have the information because they have a doubt that the refunds have been perhaps claimed by the assessees and so the information would be available with the assessees and not the Department. It really beats logic why an assessee should seek refund which leads to such questions before the CIC]
The Commission found this submission curious because refund of excess income tax paid by assessees is his right and the income tax authorities are duty-bound to assure that they exercise due diligence in making these refunds within a reasonable period. One would surely expect that given the volume of transactions in refunds handled by the Income Tax Department, there would have been some form of central monitoring for these. But no such monitoring is in place. As such, Income Tax Department is not in a position to state clearly as to how many refund-claims it has received in any given year or over the years; how many it has resolved and how many lie in balance.
Considering the larger ramification of this information, the Commission felt that it was important that the views of the highest authority in the income tax hierarchy is received before the Commission makes up its mind about further steps in this petition.
So the Commission asked the Chairman, Central Board of Direct Taxes (CBDT) to file a written-submission about what the policy of the Department is regarding attending to the several refund-claims filed by income tax assessees and, what system has been kept in place to respond to these claims without loss of time, or at least within a reasonable time.
He is also asked to inform the Commission as to what monitoring mechanism is available for the higher authorities in the Department to ensure that the assessees are not discomfited in receiving these refunds.
CBDT is also asked to depute a senior officer to explain the position.
If not for the CIC, the CBDT is expected to have this kind of information and if they don't have it, they should have a mechanism to have it immediately.
This should apply to the CBEC also. It seems thousands of refund claims are pending, especially in Service Tax and there seems to be absolutely no monitoring. The sad spectacle of officers running after consultants to persuade their clients not to insist on interest for delayed refunds is far too common.
CIC's Interim Order F.No.CIC/AT/A/2008/00238 & 00239 Dated, the 16th July, 2008.