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Search and seizure: 77% of income revisions don’t stand judicial scrutiny

Search and seizure: 77% of income revisions don’t stand judicial scrutiny

A sample analysis by the Comptroller and Auditor General (CAG) revealed that more than three fourths of the income additions sought by the taxman under search and seizure don’t stand the test of judicial scrutiny at the levels of CIT Appeals/appellate tribunals. “We also observed cases where sustainability of additions made in the assessment orders was nil at the appellate stage,” the top government auditor wrote.

The CAG found that income-tax department’s inadequate handling of search and seizure cases had a monetary impact of Rs 3,729 crore in the 1,291 cases that were audited. The cases audited by CAG found that they lacked uniformity in making additions during assessments apart from non-compliance of CBDT’s instructions and orders in many cases. It noted that in some instances income escaped assessment due to incomplete assessments within specified time limit and in several other cases department failed to levy appropriate penalty.

As for deletion made by appellate bodies in these cases where additional income had been added, the report noted that it was primarily because existing judgments were not considered by assessing officer during assessment in some cases while provisions under which additions made were not clearly mentioned in assessment order in some other instances

 

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