CAG pulls up I-T Dept for delaying tax refund

Criticising the I-T department’s performance, CAG in its report tabled in Parliament stated that the department failed to adhere to the much-touted time frame in processing the refunds of small tax payers and senior citizens.

CAG, which conducted performance review of I-T refunds processed during 2005-06 to 2008-09, has detected several instances of inordinate delay on the part of the I-T department in processing the refunds, particularly the low value refunds of small tax payers.

“We noticed instances of unwarranted delays at various stages in processing, issue of refunds after processing and of refunds not received by the assessees after issue,” CAG noted. “The department had set a standard for settling the refund claims in four to six months. Our analysis, however, showed that refunds were processed in an average time of 10 months after submission of the claim,” CAG noted with concern.

The time taken is much higher than international standards ranging from 24 days to 6 weeks. The refund vouchers took an average of 40 days to reach assessees after their issue. The CAG was shocked to find that despite the intent the department was unable to process the refund claims of senior citizens on priority.

The average time taken for receipt of refund claim by a senior citizen is 12 months whereas the I-T department has fixed the benchmark of maximum of three months for priority processing of such claims.

What has irritated the  CAG is the types of replies it received from the department on reasons for delay  in  refund claims of senior citizens.  

“Some stated that the assessment module provided for this priority processing could not be run due to systematic problems while others stated that there were no special arrangements for senior citizens,” CAG noted.

Irked over such replies, CAG has asked the Finance Ministry to set up a mechanism at the Bangalore-based Central Processing Centre to filter refund claims of senior citizens for priority processing.