Over 94 per cent of the country’s uncollected tax demand of Rs 5.75 lakh crore is difficult to recover, the Comptroller and Auditor General of India has said. The CAG, in an audit report on direct taxes tabled in Parliament on Friday, also hauled up the Income Tax Settlement Commission and the income-tax department for their slow functioning and inability to enforce collection and recovery of outstanding demand.
The audit report said the uncollected tax demand had risen 18 per cent to Rs 5.75 lakh crore in 2013–14 from Rs 4.86 lakh crore in the previous year.
“We have noticed considerable delay at various stages on the part of commission and income-tax department as a number of applications filed prior to June 2007 are still pending with the commission for disposal,” the CAG report said. “Besides, I‑T department took considerable time in submission of required reports to the commission and giving effect to the orders of commission,” the report said.
Out of the total outstanding tax demands, Rs 2.18 lakh crore was locked up in appeals with the I‑T commissioner, Rs 1.80 lakh crore in litigations with higher courts, it said. The issue of rise in uncollected tax demands has been cited as an example of aggressive tax practices largely aimed at showing higher tax collections to meet budgeted targets.
Source: Economics Times