Huge amounts detected in internal audit: CBR orders recovery

The Central Board of Revenue (CBR) has expressed concern over delay in desk-audit of companies by Income Tax (Audit) Commissioners during 2006-07, and has ordered forthwith recovery of duties and taxes in cases where detections of huge amounts were made through inspection/internal audit.
Sources told Business Recorder on Tuesday that the Audit Commissioners had to conduct desk-audit, field audit and correspondence audit of companies under section 177 of Income Tax Ordinance 2001, but they were unable to achieve the set targets.
The issue was discussed in the last commissioners'' conference where they were directed to lay more emphasis on desk-audit in company cases. Tax authorities were also unhappy over the slow pace of recovery made by the directorates of inspection and internal audit. The Board has detected a large number of cases involving serious violations of rules and regulations committed by registered units.
Huge amounts'' detection was made in these cases, but recovery process was very slow. On the other hand, audit had also detected violations committed by tax officials in field formations, but no action was taken against them.
Now, the CBR has issued instructions to the internal audit department to convert detection into a meaningful action for recovery in all cases and take appropriate action against tax officials involved in tax frauds.
The CBR has directed the field offices to focus on liquidation of pending inspection/audit reports for last many years. It is expected that billions of rupees would be recovered under this exercise.
So far, internal audit has unearthed revenue loss of Rs 9,000 million in around 250 cases detected during July-March (2006-07). Out of this amount, Rs 750 million was recovered during the period under review, which needs an immediate improvement. Particularly, a meager amount of Rs 3000 million was detected through in last financial years.
Sources said that the Board has also decided to bring the inspection process in line with the CBR reform process. In this regard, the Board would abolish the system of ''quota inspection schedules''.