(a) whether test check by audit of about one thousand private banking companies and
non-banking financial companies has revealed serious irregularities in not following
the statutory provisions resulting in short levy of taxes of Rs. 1,04,177.18 lakhs;
(b) if so, the reaction of the Government thereto; and
(c) the action taken/proposed to be taken to realize the tax amount from them?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHRIPAD YESSO NAIK):
(a) The C&AG in their Report No. 12A of 2002, laid down in Parliament on 15th March, 202,
have pointed out certain irregularities on account of failure to follow the statutory
provisions leading to alleged short levy of tax of Rs. 1,04,177.18 lakhs in 1587 cases.
(b) and (c) CBDT has directed vide Instruction No. 1928 dated 7.8.1995 to their
Assessing Officers working in all Commissionerates of Income Tax in the country to invariably
initiate remedial actions including rectificatory measures, in all cases of revenue audit
objections irrespective of the fact whether the revenue audit objections are accepted or not
accepted by the department. To clear audit observations, field units have since been
instructed to settle cases on priority basis. This review of private banking companies &
non-banking financial companies has been selected by the Public Accounts Committee of
Parliament for further examination and Oral Evidence of the Ministry of Finance & CBDT.
A detailed report has already been submitted to Lok Sabha Secretariat and to C&AG by the
CBDT and Department of Revenue.