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Senior I-T authorities ignored computer system failure

The apathy of income tax (I-T) authorities caused a loss of around Rs35,000 crore in tax collection in the city.

mumbai Updated: Oct 05, 2011 01:37 IST
Manish Pachouly

The apathy of income tax (I-T) authorities caused a loss of around Rs35,000 crore in tax collection in the city.

The loss occurred, as information collected by the department’s Central Information Branch (CIB), was not disseminated to concerned field officials from 2005-06 to 2009-10.

CIB gathers information from various bodies, including local municipal corporations, Regional Transport Offices (RTOs), banks, hotels, restaurants, travel agents, airlines, mutual funds and Reserve Bank of India (RBI) among others about high spenders and investors and uploads the same in the computer system.

The information is then segregated automatically by the computer system and disseminated to concerned income tax officers (ITOs), who do assessment work or to the investigation wing of the department, which conducts searches. The Directorate of Systems of the income tax (I-T) department in New Delhi handles the overall computer network system.

However, a non-functional computer system and lack of training to officials in handling the system, the relevant information was not disseminated thereby causing a huge revenue loss to the department. The problem was aggravated as a 2003 order of the finance ministry had banned manual dissemination of information.

A letter, dated May 10, 2010 written by AC Tejpal, who was then director of income tax (CIB), Mumbai, to the Indian Audit and Accounts Department, had said that the CIB had since 2005-06 to 2009-10 collected over 11.4 crore pieces of information (on unaccounted income) of which 2,247 were disseminated to concerned officials. The letter mentioned that this information was disseminated in 2006-07 manually (despite the ban on manual dissemination), by copying the same in compact discs. It further mentioned that not a single piece of information was disseminated through computer system. In 2,247 pieces of information, the CIB found unaccounted income of Rs14,758 crore on which total tax payable was Rs5,000 crore. The CIB Mumbai was trying to get the system rectified since 2005.