The comptroller and auditor general (CAG) found that the Income-tax department has examined one sample for scrutiny and found that the tax calculated is lower by Rs 44,000 crore. About 3.32 lakh cases have been audited by CAG in the FY 2017-18 and 2018-19.
The report states that it shows a lack of seriousness of the department despite pointing on the repetitive note about audit reports “It also points the lack of effective monitoring and absence of an institutional mechanism to respond to the systematic and structural weaknesses leading to revenue leakage,”
The calculation includes various mistakes on the assessment done such as granting depreciation/business losses/capital losses along with the instances increase of business in the wrong way. In addition to that several more refunds and interest on refunds have granted.
Moreover, numerous assessee suffered harassment due to inconsistency of tax deducted at source (TDS) in return to more than the return of 17 lakh “Due to such mismatch TDS credit is denied to the assessee (taxpayer) despite receipt of the revenue by the department or presence of Form 16/16A issued by the deductor in support of his claim. This results in disallowance of refunds and also in the creation of infructuous demands for tax resulting in avoidable harassment to the taxpayer,”
Also, the report has given the lack of inconsistency in the Income Tax system who estimates the interest on late tax payment 
“Audit noticed 1,130 instances where modification by AOs in interest amount resulted in blockade of refund amounting to Rs 4,395.7 crore which was due to be payable to the concerned assessee,” the information of LTCG suggests that the audit report reveals that the taxpayers who buy or trade-in companies with the small stock will not be placed for scrutiny process.
