Tax forms and a calculator. (Photographer: Luke Sharrett/Bloomberg)

One In Three Registered Firms In India Not In Income Tax Database: CAG 

Nearly 33 percent of registered companies in India are not in the database of the Income Tax Department, the central auditor CAG said on Friday.

The Comptroller and Auditor General said it uncovered the discrepancy after ascertaining the status of IT returns filed by the corporate assessees, companies listed with the Registrar of Companies, and compared them with the data obtained from various sources, including the Ministry of Corporate Affairs.

“The difference between the working companies registered with ROC and the number of companies reported by DGIT (Logistics, Research & Statistics) ranged from 2.94 lakh (33.3 percent) to 3.94 lakh (36.4 percent) which indicates the extent of non-filing/stop filing of the return of income by the companies,” said the CAG in a report tabled in Parliament.

Also, there was “variation in the numbers of scrutiny disposal” during 2015-16 between data furnished by DGIT (System) and that available at the assessing officer level in Demand and Collection Registers.

During FYs 2012-13 to 2015-16, about one third of the companies registered with the ROC were not in the database of the ITD (Income Tax Department). Only 19.57 per cent of the corporate non filers identified by the ITD had filed their returns in response to the notices issued by the ITD.
CAG Report

With an aim to bring ‘Zero Tax Companies’ into the tax base, the CAG has suggested that the tax department should devise a framework for accountability.

Under the framework, the report said, the officials concerned “may be made accountable for the effective use of Non-Filers Monitoring System for identification of both corporate and non-corporate non filers”.