Direct Tax

Report No.30 of 2017 - Performance audit Union Government Payment of tax by certain companies under special provisions of section 115JB Reports of Department of Revenue – Direct Taxes

Date on which Report Tabled:
Fri 04 Aug, 2017
Date of sending the report to Government
Government Type
Union Department
Direct Tax
Sector Taxes and Duties,Finance


The corporate assessees, irrespective of their income level are required compulsorily to file their income tax returns annually.  However, total number of corporate assessees filing returns with the ITD was much less as compared to the number of working companies registered with Registrar of Companies.  The ITD’s efforts to bring such assessees into the tax net /Certain ambiguities in the interpretation of legislative provisions/ adjustments to net profit or loss as per profit and loss account for the computation of book were examined during audit.

The performance audit covered cases of scrutiny assessments, appeal and rectification completed during the financial years 2012-13 to 2015-16.  We also checked summary assessment records in respect of the selected cases where scrutiny assessment was not completed till the date of audit.  We identified 195assessment cases where systemic issues including ambiguities/lacunae in provisionsof section 115JB of the Actwere noticed. Audit came across several issues/instancesof non-compliance to the provisions of Act/Rules in 589 assessment cases.In 34 assessment cases,ITD levied tax under normal provisions of the Act though tax was leviable under special provisions


The difference between thenumber of working companies registered with Registrar of companies (ROC) and those reported by DGIT (Logistics, Research & Statistics) ranged from 2.94 lakh (33.3 per cent) to 3.94 lakh (36.4 per cent) during FYs 2012-13 to 2015-16 which indicated the extent of non filing/stop filing of the return of income by the companies. About one third of the companies registered with the ROC were not in the database of the ITD.


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