Thursday, 24 May 2012



OFFICE OF THE PRINCIPAL CHIEF CONTROLLER OF ACCOUNTS CBDT MIN. OF FINANCE 9TH FLOOR LOK NAYAK BHAWAN NEW DELHI 110003


THE ORGANISATION

            (A) THE CENTRAL BOARD OF DIRECT TAXES
           
The Historical Background of the Board is that The Central Board of Revenue as the Department apex body charged with the administration of taxes came into existence as a result of the Central Board of Revenue Act, 1924. Initially the Board was in charge of both Direct and Indirect Taxes. However, when the administration of taxes became too unwieldy for one Board to handle, the Board was split up into two, namely the Central Board of Direct Taxes and Central Board of Excise and Customs with effect from 1.1.1964. This bifurcation was brought about by constitution of the two Boards u/s 3 of the Central Boards of Revenue Act, 1963.
The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also function as a Division of the Ministry dealing with matters relating to levy and collection of Direct Taxes and formulation of policy concerning administrative reforms and changes for the effective functioning of Income-Tax Department.
Composition and Functions of C.B.D.T.
The Central Board of Direct Taxes consists of a Chairman and following six Members:-

1.                  Member Income Tax
2.                  Member Investigation
3.                  Member Audit and Judicial
4.                  Member Legislation
5.                  Member Personnel
6.                  Member Revenue

The Chairman and Members of the Central Board of Direct Taxes are assisted by Joint Secretaries, Directors, Deputy Secretaries, Under Secretaries and ministerial staff to carry out their day-to-day functions.


Other subordinate offices comprise 110 Chief Commissioners of Income Tax & DGIT’s who head the Income-tax Department at the Regional level. The Commissioners of Income Tax and Commissioners of Income-Tax (Appeals), Appropriate Authorities work under them.  The Commissioners function in a territorial jurisdiction or have jurisdiction over a particular class or group of assesses.  The Commissioners of Income-Tax are assisted by Deputy Commissioners of Income-Tax (Appeals), Assistant Commissioner of Income-Tax and Income-Tax Officers.  The Deputy Commissioners, Assistant Commissioners and Income-Tax Officers, who are in charge of assessment work, are referred to as Assessing Officers.  Job classification norms have been laid down to divide assessment work amongst different cadres of Assessing Officers.  Inspectors of Income-Tax and the clerical staff assist Assessing Officers.
(B) ORGANISATION OF THE PRINCIPAL CHIEF CONTROLLER OF ACCOUNTS, CENTRAL BOARD OF DIRECT TAXES.

The Principal Chief Controller of Accounts (Pr. CCA) heads the accounting organization of the Central Board of Direct Taxes with Revenue Secretary as the Chief Accounting Authority.  At the field level, there are 52 Zonal Accounts Offices (ZAOs) under the jurisdiction of Principal Chief Controller of Accounts, Central Board of Direct Taxes. Earlier there were only 24 ZAOs, however on Account of Restructuring of Accounts Wing of CBDT 28 new ZAOs & 4 E-PAOs have been created. The organization chart reflecting the different tiers of posts and jurisdiction is shown in chart 1.3.

The main responsibilities allocated to the Office of Pr. CCA and its offices throughout the country are:

·         Payment functions of entire Income Tax Department.
·         Expenditure and Revenue Accounting of offices under CBDT
·         Authorization and Deauthorisation of Bank Branches to undertake direct tax collection and refund work.
·         Imposition of interest on delayed remittances.
·         A close monitoring of the Direct Tax collection made through the nominated Banks and ensuring their timely remittance to Govt. Accounts.
·         Processing the cases for opening of Personal Deposit Accounts.
·         Conducting Internal Audit/Inspection of the formations under the Income Tax Department and the nominated/accredited banks.
·         Rendering financial and technical advice to CBDT on matters relating to the collection, accounting, remittance and reconciliation of Direct Taxes.

52 ZAOs with a spatial spread encompassing the whole country assist the   Pr. CCA in discharging these responsibilities.  In addition there are 1404 Drawing and Disbursing Officers (DDOs) of which 41 are Cheque Drawing (CDDOs). The rest i.e. 1363 Non-Cheque Drawing DDOs submit their bills either to the CDDOs or directly to the concerned ZAO.  The details of the Drawing and Disbursing Officers are given in Annexure ‘A’.



ANNEXURE ‘A’


Sr. No.
Zonal Accounts Office
FPU
No. of NCDDOs under ZAOs & FPUs


  1.  
AGRA
ALIGARH
20


  1.  
AHMEDABAD
BHAVNAGAR
JAMNAGAR
47

  1.  
AMRITSAR
BHATINDA
21

  1.  
ALLAHABAD
VARANASI
GORAKHPUR
38


  1.  
BANGALORE
MYSORE
47

  1.  
BHUBANESHWAR
CUTTAK
BEHRAMPUR
SAMBHALPUR
33

  1.  
BHOPAL
JABALPUR
GWALIOR
38

  1.  
KOLKATA
-
48


  1.  
CHENNAI
-

42


  1.  
COCHIN
TRICHUR
CALICUT
25

  1.  
NEW DELHI
CBDT FPU
CIT FPU
52

  1.  
HYDERABAD
VIJAYAWADA
GUNTUR
TIRUPATI
138

  1.  
JAIPUR
AJMER
24


  1.  
JALANDHAR
-
11


  1.  
KANPUR
-
20


  1.  
LUCKNOW
-

29



  1.  
MEERUT
GHAZIABAD
MUZZAFFARNAGAR
10


  1.  
MUMBAI
-
33


  1.  
NAGPUR
AKOLA
36


  1.  
PATNA
MUZZAFFAPUR

47


  1.  
PUNE
KOLHAPUR
SHOLAPUR
30



  1.  
PATIALA
-
16


  1.  
ROHTAK
FARIDABAD
33

  1.  
SHILLONG
SILCHAR
AGARTALA
IMPHAL
13

  1.  
DURGAPUR
-
10


  1.  
MADURAI
-

17

  1.  
LUDHIANA
-
10


  1.  
BAREILY
MORADABAD
HALDWANI
29

  1.  
UDAIPUR
AJMER
24


  1.  
RAIPUR
-
20


  1.  
DEHRADUN
-
10


  1.  
JAMMU
-
9


  1.  
CHANDIGARH
-
17


  1.  
PANCHKULA
KARNAL
14

  1.  
JODHPUR
BIKANER
25


  1.  
COIMBATORE
-
18


  1.  
TRICHI
SALEM
26


  1.  
TRIVANDRUM
-
13


  1.  
VISHAKAPATNAM
-
31


  1.  
NASIK
-
7


  1.  
THANE
-
11


  1.  
SHIMLA
-
14


  1.  
INDORE
-
19


  1.  
PANAJI
MANGALORE
               
                 18




  1.  
BARODA
-
15


  1.  
SURAT
-
12

  1.  
RAJKOT
-
15


  1.  
JALPAIGURI
-
15


  1.  
GUWAHATI
JORHAT
DHUBRI
DIBRUGARH
59

  1.  
BHAGALPUR
-
12


  1.  
RANCHI
DHANBAD
26

  1.  
HUBLI
-

16

Total
41
1363
The Operative Aspects of Tax Collection
            Direct taxes are collected through the authorized branches of the Reserve Bank of India, the State Bank of India, 26 other Public Sector Banks, the Jammu and Kashmir Bank Ltd. and 4 Private Sector Banks backed by Institutional funds, viz. HDFC Bank, Axis Bank, IDBI Bank and ICICI Bank.  The Refund work of Direct Taxes is, however, handled by the Reserve Bank of India and specified branches of SBI or its associate Banks where SBI branches are not available.  However, the Reserve Bank of India has decided to exit the business of handling Income Tax Refund Orders.  152 branches of the State Bank of      India have been authorised to handle the work at the centers where Reserve Bank of India has been handling the Refund work.

            The Collections made by the Central Board of Direct Taxes are accounted for in the following Major Heads:-          

            0020                Corporation Tax
            0021                Taxes on Income (Income-Tax) other than Corporation Tax
            0023                Hotel Receipt Tax      
            0024                Interest Tax
            0026                Fringe Benefit Tax
0028                Other Taxes on Income and Expenditure
            0031                Estate Duty
            0032                Taxes on Wealth        
            0033                Gift Tax
            0034                Securities Transaction Tax
            0036                Banking Cash Transaction Tax

            The Major Head wise net collection of Direct Taxes has been reflected in Statement 1.1,   Chart 1.1 and 1.2.




EXPENDITURE ACCOUNTS


The Expenditure Accounts of the Central Board of Direct Taxes present the total picture of receipts and disbursements under Revenue, Capital & Public Accounts Heads in respect of Income Tax Department. The Revenue disbursements reflect the total Expenditure (Charged & Voted).  The Revenue Receipts  show the total non-tax revenue like interest receipts, license fee and repayment of loans by the Government servants and so on as also the tax revenue on account of the 'Central Tax Deducted at Source' from the salary and contractors' bills. The Capital disbursements show the expenditure incurred on acquisition of immovable properties under Chapter XXC of the Income Tax Act, 1961 (MH 4075), of ready built office accommodation (MH 4059), of ready built flats for Income Tax Employees (MH 4216) and payment of loans to Government    servants     (MH 7610).  The Capital Receipts          show payment of loans paid to Government servants (MH 7610).  The recoveries on account of sale of immovable properties under Chapter XXC of       the Income Tax Act, 1961 are also adjusted against the disbursement under M.H. 4075. Hence, only net effect is shown in the Accounts.


      The  receipts and disbursements  of Public Account Head '8658', `8443' & '8675' are  operated in the Revenue Accounts  of  the CBDT.  While   the  Statement  of  Central Transactions  of  Revenue and    Expenditure   Accounts  of  C.B.D.T. are prepared  separately, these  are  put together in the Finance   Accounts. Total  receipts   and  disbursements  under  Revenue,  Capital  &  Public        Account  Heads  as  per  the Finance Accounts of CBDT for 2010-2011 have been shown at Statement 3.1  of   Accounts  Highlight,  which  depicts  balances lying under Debt, Deposit, Suspense & Remittances Heads (i.e.Loan & Advances and Public Account upto 2010-2011).

      A comparative statement for receipts under Consolidated Fund of India for the last 5 years (2006-2007 to 2010-2011) is given at Statement 3.2 of Accounts Highlights.

Contingency Fund of India

No advances were drawn by CBDT from the Contingency Fund of India during 2010-2011.

Preparation of Monthly Accounts

The Government Accounting System encompasses various   stages from recording the initial transactions in challans/ vouchers to the preparation of Annual Accounts. The           monthly accounts are compiled by the Zonal Accounts Offices on the basis of receipt/payment scrolls received from the Accredited Bank Branch and Field Pay Units             (FPUs). The compiled Accounts are than submitted to the Principal Accounts Office. The Accounts   from all the 24 ZAOs are being received in the Pr. Accounts Office in the Electronic   Format   that  is   COMPACT.   The   Principal   Accounts   Office   consolidates the Accounts received from all the ZAOs and  sends  the  same to  the Office of  Controller General  of  Accounts through E-lekha. The Annual Accounts and Appropriation    Accounts are audited and certified by the Comptroller and      Auditor General (C&AG) of India and subsequently placed before the Parliament as a constitutional   requirement.



Appropriation Accounts              
 

The  Office  of  Pr.CCA , prepares  the  Head-wise  Appropriation  Accounts  in  respect of 'Grant No.  42-Direct  Taxes'.  In  this  Grant,  two  major  heads viz., ' 2020- Collection of Taxes  on   Income    and    Expenditure'    and   '2031 –Collection   of   Taxes  on   Wealth  Tax, Security Transaction Tax and  Other Tax  are   operated   below  the Revenue Section.  In the Capital  Section  three  Major Heads  viz.,  '4075- Capital   Outlay  on   Miscellaneous   General Services', '4059- Capital  Outlay  on  Public Works' and '4216-Capital Outlay on Housing' are operated. While the expenditure is directly  booked  under  the  Major Heads '2020 ' at the initial stages,  the  expenditure  under  the  major head '2031' is  allocated  by  way of apportionment  at  the  end  of  financial  year  on  the  basis  of  the   prescribed  formula. (Statement 3.3 & Chart 3.1).

The Appropriation Accounts for 2010-2011 of Grant No.42- Direct Taxes, show a total expenditure of Rs. 2697.96 (voted) crore against the sanctioned Final Grant  of Rs.2731.84 crore (Voted)  under the Revenue Section. Total expenditure is Rs.1572.28 crores against the Final Grant of Rs 1575.17 crore under the 'Capital Section'. Details of Head-wise budget allocation and expenditure during 2010-11, may be seen at Statement 3.4 and Chart 3.2 and the Appropriation Accounts for the year 2010-11 at Statement 3.6 and Chart 3.1.
           

Collection Charges

Collection charges appearing in the Accounts indicate the expenditure incurred in collecting  various kinds of Direct Taxes.   The Income Tax Department collects  these taxes from the public. However, disputed cases are referred to the court of law, either by   public or by the Income-Tax Department and collections are made through court after   the  finalisation  of    such  disputed  cases.  A part  of  expenditure  incurred  on  the adjudication of disputed taxation cases pending in the court are adjusted in the books of   M/o Law and Justice in their respective Grant under the Major Head ‘2020’ Collection of Taxes on Income and Expenditure  and intimated to  the Office of  Pr.CCA, CBDT   for  the  purpose of             allocation of collection charges.


           The Expenditure is initially booked under the Minor Head   'Direction  and Administration', 'Collection   Charges -Income - Tax' and 'Other   Expenditure'   below  the Major Head '2020'. At the end of financial year, the total expenditure is proportionately allocated as collection    against   various   categories  viz.,   Income  Tax,  Corporation   Tax, Taxes on Wealth   Tax, Security Transaction Tax and Other Tax etc. on the basis of formula assigned  by the  Central Board  of  Direct  Taxes.  Collection charges relating to Taxes on  Wealth Tax, Security Transaction Tax and Other Tax  are  then  deducted  from the Major Head '2020' and transferred to the  Major Head '2031'.  The formula  used for apportionment of  collection charges for the year 2010-2011 is given below:



1.            Income Tax and Corporation Tax                               97.50%
2.            Taxes on wealth                                                            0.25%
3.            Security Transaction Tax                                              0.50%
4.            Other Tax                                                                      1.75%
                        Total                                                                          100.00%
           
            Note: The inter-se allocation of Corporation Tax and Income Tax is done in the          ratio of 1: 6.5

       
            Statement of  Cash  Flow
           
             The statement of cash flow for the year 2010-2011 is  placed at Statement No 3.10 The flow indicates that total expenditure is Rs. 4802.71 crores of which Rs.4665.20 crores     is financed from Consolidated Fund of India  and Rs 137.51 crores from Public Account.  Out of total receipts of Rs. 440967.02 crores  Rs.440339.29 crores have been credited to Consolidated Fund of India  and Rs. 627.73  to Public Account. 

Other Vital Account Highlights are available in Statement No 3.7 to 3.13 and Chart No.3.1, 3.2 and 3.3.



INFORMATION TECHNOLOGY


            During the last one year several important initiatives have been taken in the area of information Technology in order to enhance the efficiency of the day to day functioning of the ZAOs. Around six high level application software packages are presently being used of the HQs and in all the 24 ZAOs across the Country for monitoring budget execution, maintaining receipt and expenditure accounts. Bank reconciliation, evaluation of penal interest charged to banks for late remittances of government receipt etc.


COMPACT       The new version of this software (6.0) launched by the NIC has been installed at all the ZAOs. All the 24 ZAOs are on live run and the account in respect of them are being received in the H.Q. office in electronic format. This software covers all the major accounting functions i.e. pre-check, compilation, GPF, budget and pension.

            It captures the accounts data from the original source i.e. the bill and this improves the quality of data used for compilation and consolidation of accounts. The software also provides functional interfaces among various modules to enhance data integrity and enforce process validation and this integrates information through electronic incorporation through Text files.

            All area requiring troubleshooting are clarified and set right from Hqrs. Office. In case of any problem in Expenditure Account at any of the ZAO, the data base of the said ZAO is required to be received at HQ through VPN for sorting out the problem in consultation with NIC. Vendor Technical Support (VTS) have been provided to a few ZAOs as per their requirement for this software as well as for implementation of RAMS, e-lekha etc.

            The account of all the 24 ZAOs consolidated through COMPACT is uploaded in e-lekha for further transmission to the Controller General of Accounts office for consolidation of the monthly accounts of the entire Government of India.

            The basic functions of Principal Accounts Office covered by this [software are as follows:-

Ø     Annual Account – Finance Accounts and Appropriation          Accounts

Ø     Authorization from other Ministries and their        Reporting/Monitoring

Ø     Budget preparation and Monitoring

Ø     Bank Reconciliation.





NPS    A New Pension Scheme was launched by government of India W.e.f. 01.01.2004 for all fresh recruits who joined the Central Government on or after 1st Jan 2004. In this regard software for implementation of New Pension Scheme has been installed and is running successfully at all the 24 ZAOs of CBDT. For implementation of this scheme all ZAOs, CDDOs and NCDDOs are required to be registered with NSDL.  Thereafter, ZAOs/CDDOs have to upload the details of monthly contributions deducted from salaries of each employee under their control.   The registrations of all as above with NSDL have been completed.  All ZAOs and CDDOs have started uploading the details as required . 

CDDO2PAO Package            The CDDO2PAO package introduced by o/o the CGA as one of the module of COMPACT for incorporation of expenditure details of CDDOs in monthly account has been installed in most of the FPUs under the ZAOs. For successful implementation of this module adequate hardware have been provided at most of the FPUs and at few FPUs Vendor Technical Support have also provided. The same is running successfully at most of the FPUs under all the ZAOs. Earlier, the paid vouchers were received in the ZAO office from the FPUs who in turn feed the vouchers received from the FPUs manually in the COMPACT Software. With the implementation of CDDO2PAO package in most of the FPUs the vouchers are now being fed at the level of the FPU and an electronic copy of the same is sent to the ZAOs for incorporation in COMPACT.

Multi Protocol Level Virtual Private network MPLS VPN   O/o Pr.CCA, CBDT has set up MPLS VPN to link up all the ZAOs on line to HQs. All software applications and reference data used by the ZAOs are now developed and maintained centrally in the HQ IT – Centre. Applications and reference data updates (such as bank directories, account codes etc) are maintained centrally. This is a giant step towards improving the quality of information and data provided to the M/o Finance and O/o CGA. The main advantages of VPN are:

Ø  It provides network at all the 24 Zonal Accounts Offices spread throughout the country and the Office of Principal Chief Controller of Accounts at Delhi.

Ø  It enables real time transfer of data and information between the ZAOs and the Office of Principal Chief Controller of Accounts.

Ø  It also enables the Office of Principal Chief Controller of Accounts at Delhi to monitor the day to day functioning of the Zonal Accounts Offices.

Ø  It enables the use of centralized application of software for both Receipt and Expenditure Accounts.

Ø  It will enable the centralized processing of payments through ECS which will result in better cash management on Expenditure side.

Ø  On the revenue side it enables the provisioning of Revenue details, detailed head wise figures of revenue on a daily basis, if required.

Ø  It replaces the existing system of use of FAX, Telephone, E-mail etc. for compiling flash figures.


E-payment:   This office had started the process of implementation of e-payment in all the 24 ZAOs as per directions of O/o CGA.  As per directions of CGA, e-payment has to be made functional in all the 24 ZAOs w.e.f 31.3.2012.   In this system, after ZAO passes a bill for payment the electronic payment file will be digitally signed by the ZAO (using a public key and a private key) and uploaded to the bank for making the approved payment to the beneficiary. Each approved payment would carry a unique identification number generated by “COMPACT”. The bank will decrypt the file using the same public key and transfer the funds to the beneficiary. Details of the purpose of the payment (invoice no. of the vendor, description of the payment, etc.) will also be transferred electronically along with electronic fund transfer. The bank will send an electronic confirmation of the payment to the ZAO. For this purpose, all the preparatory work such as obtaining digital signatures of the officers, providing hardware of specific requirement, providing necessary training etc. have already been initiated.


Some of the benefits which would ensure are:

Ø  Reduction in the government liability towards Banking Cash Transaction Tax.

Ø  Increased transparency, reduction in delays and the elimination of rent seeking activities in the PAOs Office.


Ø  Improved cash management.

Ø  Reduction in the number of manual business processes associated with the printing, custody and issue of cheques.



Receipt Accounting Management System     

This software is basically meant for receipt accounting at ZAO level. This office in technical support with NIC has developed this software; however, a few of the module of this software are still at developing stage. The software has been developed in such a way that the receipt accounts may be incorporated in the COMPACT so as to integrate Receipt and Expenditure Accounts through a single unified package. The salient features of this software are enumerated as follows:

Ø  Automatic reconciliation of receipt and remittance.

Ø  Data upload through electronic files (Pre-formatted) received from banks (i.e. NDMS, DMS etc) apart from manual entry.

Ø  Calculation of Penal Interest on delayed remittances.

Ø  RAMS is capable of comparing the TIN data with its database.

The RAMS software is now full-fledge operational in all ZAOs and Monthly Receipt Account is also prepared in RAMS which is then uploaded  in e-lekha for further submission to CGA office.

 (Details on RAMS may kindly be seen in Receipt Section)



INTERNAL AUDIT



The Central Board of Direct Taxes is dealing with matters relating to levy and collection of Direct Taxes and formulation of policy concerning administrative reforms and changes for the effective functioning of Income-Tax Department. During 2010-11, its expenditure was Rs.2697.96 Crores. Principal Chief Controller of Accounts, Central Board of Direct Taxes has been assigned the duties of conducting Internal Audit of the expenditure incurred by the Offices of the Income Tax Department spread through out the Country. Besides this the Internal Audit Parties are also entrusted with the responsibility of conducting the Audit of the Receiving and Nodal Branches of the Agency Banks. The Duties on this account have increased in view of the implementation of “On Line Tax Accounting System (OLTAS)”. 24 Internal Audit Parties have been constituted in each ZAO w.e.f. 01.04.2007 to conduct Internal Audit. 

FUNCTIONS AND DUTIES ENTRUSTED TO THE INTERNAL AUDIT :

The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also functions, as a Division of the Ministry/dealing with matters relating to levy and collection of Direct Taxes.
The Principal Chief Controller of Accounts (Pr.CCA) heads the Accounting Organization of the Central Board Direct Taxes with Revenue Secretary as the Chief Accounting Authority.  At the field level, there are 24 Zonal Accounts Offices (ZAO) under the jurisdiction of Principal Chief Controller of Accounts, Central Board of Direct Taxes.
The conducting of internal audit is one of the main responsibilities allocated to the office of Pr.CCA and its offices throughout, the country.

The Objective of Internal Audit:

The objective of conducting Internal Audit is to ensure compliance of Rules & Regulations & to guide & assists Drawing & Disbursing Officers in maintaining records in the prescribed format.


 Risk Based Model Audit:

To help the organization accomplish its objective in a systematic, disciplined manner and to evaluating & improve risk management process. It has been decided by the higher authorities to perform a Risk Based Audit, and later this methodology can be used for conducting Internal audit in future.
      
I.         The duties of Internal Audit wing includes:           

1.     Study of the accounting procedures adopted by the Department with a view to examine their correctness, adequacy and free from any defects or lacuna.e in the system;
2.     Watch the implementation of the prescribed procedures and the orders issued from time to time ;
3.     Scrutiny and check of payment made by the Drawing & Disbursing Officer;
4.     Investigation of important areas and other connected records;
5.     Co-ordination with Controller General of Accounts and Ministry of Finance with regard to Internal Audit Procedures;
6.     Periodical review of all Accounting Records;
7.     Pursuance & Settlement of objections raised by Statutory Audit Wing i.e. Comptroller & Auditor General of India and other matters relating to Statutory Audit;
Besides above, the Internal Audit also undertakes the audit of the banks authorized for collection of Direct Taxes and their remittance to the Govt. account along with the levy of penal interest on delayed remittances.
As such the internal audit wing plays an important role in planning, improvement and adopting of corrective measures to be taken before the statutory audit.

II.          Arrears, of audit and steps taken to clear the same.

Out of 1625 units under the jurisdiction of this office, 907 units came under the purview of audit during the financial year 2010-11 on the basis of annual forecast of IAPs (depending upon periodicity whether Annual, Biennial and Triennial). There has been a rapid growth in the number of administrative units, consequent upon restructuring of the Income Tax Department.  However on the other hand the number of IAPs and the associated working strength has reduced.  On account of this and other administrative reasons, 357 units including Banks could be audited in 2010-11 with a short fall of 550 units. The shortfall in the no. of units audited was due to acute shortage of staff in the Internal Audit Wing.  A Major Step was taken by the Principal Chief Controller of Accounts, CBDT to clear the arrears by restructuring the Internal Audit. All the 24 ZAOs were directed to form a Party on rotational basis for Internal Audit of all the DDOs/ Banks/Personal Deposit Account under their jurisdiction.

          Further, with the specific aim to clearly bring out the procedure for booking & reconciliation of refunds with the Refund Banker & Reserve Bank of India , an audit of Refund Banker was conducted by the O/o Pr.CCA, CBDT.

          In addition to above, this office also conducted Audit Inspection of “Personal Deposit Account” of 56 offices of Income-Tax department. Audit parties raised 292 paras of audit observations.

III.        General conditions of maintenance of Internal Accounts Records :-

The state of maintenance of accounts records has been found mostly unsatisfactory. The point has been repeatedly emphasized in the audit reports which are submitted to the concerned administrative heads after completion of audit of the DDOs under the charge of the respective ZAO`s. Most of paras are due to poor Knowledge of DDOs in field offices.

IV.    Broad reasons responsible for (III) above and remedial measures, if any taken or proposed to be taken:-
Absence of sufficient trained staff in the outstation field units and low priority accorded to accurate accounting of receipts and expenditure seems to be the principle reasons for (III) above.  At the instance of Internal Audit, essential records which were not being maintained are now being maintained in some of the offices which have been audited by IAPs.  Following remedial measures are needed:

1.    Raising the level of DDO:- It has been noted that DDO function is being performed at very low level such as Inspectors/ Tax Assistants etc. Many a times they are not sensitive to the criticality  of the role of DDO. 

2.    Appropriate training to be imparted to DDO:- DDO function has undergone tremendous change in the wake of new developments such as NPS (New Pension Scheme) & ETBAF (Electronic TDS Book Adjustment Form).  In view of above, it is crucial to impart training to DDOs.

V .    Detail of schematic review, if any, made by the Internal Audit:-

The audit on the functioning of computer centers and wards for refund orders was conducted by the Internal Audit Parties and deficiencies noticed e.g. maintenance of stock register of refunds voucher books, quarterly review of the enchased vouchers, physical verification of stock taking of voucher books had been pointed out in the audit report for rectification but the department has not shown significant improvement.

          The Income-Tax Department initiated a pilot on the concept of “Refund Banker” from 01.10.2007 for the purpose of implementing the scheme of “Refund Banker” through the State Bank of India.

Further, with the specific aim to clearly bring out the procedure for booking & reconciliation of refunds with the Refund Banker & Reserve Bank of India, an audit of “Refund Banker” i.e. State Bank of India, Cash Management Product Centre, Mumbai for two years i.e. 2008-09 &2009-10 was conducted during the period from 31.05.2010 to 11.06.2010. During the Audit, it was found that Government had to shell out more Rs. 5.34 Crores in addition to agency commission charged by the Bank (paid by RBI) and Service Charges, charged by Refund Bankers (paid by ITD) as per the MoU. This amount pertains to the period when the Refund Banker scheme was implemented only in 14 cities and till now, the scheme has implemented in all over India. It may result in significant increase in the cost of refund, which is to be borne by the Government.

Audit observations on performance of Refund Banker i.e. State Bank of India are  listed below:-
·         Audit Report has pointed out that the percentage of returned refunds (both number of returned refunds and amount of returned refunds) has been on the rise.  Product-wise analysis shows that paper refunds & NECS have been the major product categories contributing to returned refunds;
·         It has also been brought out in Audit Report that the accounting procedure for the pilot of Refund Banker Scheme which is being circulated to all ZAOs , is also required to be circulated to the CPM branch, Mumbai which is dealing with the Refund Banker Scheme, so that the refunds could be accounted timely and accurately.
·         Audit Observation regarding various important issues as well as several performance & efficiency related issues  on part of  Director General of Income Tax(Systems)  are listed below:-
·      Performance and Efficiency implications of changes made in MoU;
·      Cost implications of the changes/amendments made in MoU;
·      Cost effectiveness of the Refund Banker Scheme to Government of India;
·      Wrong data feeding by the Income Tax Department;
·         Need for regular meetings of High Level Committee constituted for implementation of   pilot of Refund Banker Scheme;
·         The important changes required with regard to performance and economy parameters in the MoU signed on 25th September 2008 over the earlier entered on 4th April 2007 between the Refund Banker & DIT(System);
·         Corrective actions as pointed out in the Audit Report were required to be taken by the Income Tax Department so that the Refund Banker Scheme could be implemented in most effective and efficient manner.
          Also, an Internal Audit Inspection for the period 2004-05 to 2009-10 in r/o O/o the Additional Commissioner of Income Tax, Range-I, Gorakhpur was conducted by the  Internal Audit Party, ZAO, CBDT, Allahabad with a specific aim of checking the Refund Cheques belonging to the period of fraudulent payment of Refund of Income-Tax made by ACIT Gorakhpur. There has been fraudulent payment of Income-Tax  amounting to Rs.35,25,600/= in the O/o Additional Commissioner of Income-Tax, Range-I, Gorakhpur.  This happened due to  following shortcomings on part of DDO, as observed by the audit party:-

1.    No basic records such as “Refund Register” (wherein daily refund payment details  e. g.  Cheque Number, date & amount etc.  are  required  to be  mentioned) were found maintained in O/o the ACIT, Range-I, Gorakhpur, in absence of which Rrconciliation between actual payments made by the bank and list of Refund cheques could not be done in order to check the genuineness of the payment.

2.    Besides, the non-maintenance of important records, it was noticed by audit party that even the basic procedures/precautions to avoid fraudulent payments were not observed by the DDO.
3.    The fraudulent payment of Rs.32,25,600/= was made due to copying of signature of an authorized officer, Sh. A. P. Mani, Income Tax Officer who was posted in the ward 1(1) for the  period August 2005 to November 2008.  The cheques, with signatures of Sh. A. P. Mani beyond this period and with stamps of different wards, were encashed by the bank.
4.    It has been observed that besides the fact that basic procedures to avoid fraudulent use of Income-Tax Refund Cheques were not observed by the DDO, the  bank also did not observe the basic security measures such as:-
(1)    To check the period of posting of officials whose signatures have been authorized to issues ITROs –
In the event of any change in the incumbency of the signing official on account of transfer to other ward/retirement/termination of service/ expiry etc. duly attested signatures of relieving official are furnished to the bank, and the signatures of previous incumbent are required to be deleted from the record. The prescribed procedures of deleting the name of previous incumbent was not followed by the bank strictly, resulting in above irregularity.

(2)   To check the serial numbers of Cheque Books to be used in different  wards-
The serial numbers of ITRO Books allotted to each ward/Circle and the distinct number of foils in each ITRO books is required to be intimated to the Bank by the DDO. It has been found that in case of fraudulent cheques, stamps of different wards below the signatures of Sh. A. P. Mani were affixed.
(3) Not verifying high value Refund Payments with concerned authorized signatories –
Cross verification of the high value Income Tax Refund Order Advice, on receipt, is supposed to be done by the Bank with the concerned Income Tax Officer for its genuineness, and the fact is recorded on the ITRO Advice.  But the same was not followed by the bank.

Economy as suggested in “Public Deposit Account”

During the conduction of “P D Account Audit” of various offices of Income Tax department, it has been observed by the audit parties that the money seized by DIT(Investigation) goes through 3 bank accounts before it finally gets credited to Consolidated Fund of India. As per new system, in all the search & seizure cases, the  money seized during raids is transferred to Central Circle I, II and III.  Subsequently, these are then transferred from CIT (Central) to the concerned CIT under whose jurisdiction the assessee falls.  This leads to enormous delay in credit of funds to the Consolidated Fund of India.  In certain cases, it has taken more than 2 years .  This multi-layered process results in undue delay in remittance of money seized through Search & Seizure operations to Government account.

         


Part-II

LIST OF MAJOR IRREGULARITIES IN THE YEAR 2010-11


1.   Cases of Non Recovery of Govt. dues from Central Govt.  Dept./State Govt./Govt. Bodies/Pvt. Parties.
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1.
Corporation Bank, Nodal Br. Kol., (I.R. No.1)
              4,72,302
Non-payment of penal interest for delayed remittance of CBDT Receipts.
2
CBI Nodal Br. Kol (I.R. No. 4)
              3,20,409
                -DO-
3
Allahabad Bank, Nodal Br. Kol(I.R. No. 17)
              7,61,505
                -DO-
4
S.B. Travancore, Nodal Br. Kol (I.R. No.28)
              1,11,123
                -DO-
5
U.B.I. Nodal Br. Kol. (I.R. No. 30)
            32,69,385
                -DO-
6
DDO, O/o   CIT-XIV, Kol. (I.R. No. 14)
                  92,701
Less deduction of Income Tax in respect of Sh. Virendra Singh, CIT-XIV, Kol
7
State Bank of India
Ahmedabad
                 87 laks
Penal interest  pending since long time
8
State Bank of India
Ahmedabad
                 85,649
Delayed Remittance
9
Corporation Bank & two nodal branches
Ahmedabad
             2,76,000
Penal interest  pending since long time
TOTAL
1,40,89,074






2.           Cases of Overpayments
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
Addl. CIT, Ratlam
                   56,795
Excess Payment in LTC claim of Sh. Manish Jain
2
CIT Bhopal
                   77,552
Excess payment in LTC Claim of Sh. Anadi Dixit
3
CIT (A-1) Bhopal
                  50,000
Ommission of debit in the ledger of GPF group “D”
4
Addl. CIT Bhilai
                 73,000
Ommission of debit in the ledger of GPF group “D”
5
ITO, Betul
                 50,000
Ommission of debit in the ledger of GPF group “D”
6
ITO, Jagdalpur
                74,000
Ommission of debit in the ledger of GPF group “D”
7
Addl. CIT R-1 Raipur
            1,15,000
Ommission of debit in the ledger of GPF group “D”
8
DDO/ITO, New Alipurduar. (I.R. No.8)
               95,000
Overpayment of pay & allowances in respect of official due to wrong pay fixation.
9
AO/DDO,CIT (A)-I Kol (I.R. No.42)
           1,72,970
Excess drawal of T.A. plus D.A. from time to time during study leave in respect of Smt. Smita Srivastava, CIT(A)-I, Kol
10
AO/DDO,CIT (A)-I Kol (I.R. No.42)
                 50,211
Excess drawal of HRA in respect of Smt. Smita Srivastava CIT (A)-I, Kol.
11
AO/DDO,O/o Addl. CIT
Navasari
              1,00,000
Sh. J.S. Chavda AO/DDO was imposed minor penalty in 1986 for withholding increment for three years with cumulative effect.  Later on he has been allowed those  three increments. 
12
DDO, Audit Rg-I
        1,59,366
Excess Drawal of Pay and Allowances
13
                -DO-
        1,93,000
Non posting of GPF advance/withdrawals
14
                -DO-
          98,388
Excess Leave Salary paid

15
            -DO-
        1,39,348
Over payment of pay and allowance in respect of Shri Ramchadra M Balmiki, Peon (absconding)
16
DDO, Range-16(1)
              2,44,805
Non posting of GPF advance/withdrawals
17
                -DO-
        2,07,200
Excess leave salary Drawn to the turn of Rs. 2,07,200
18
                -DO-
          53,344
Non recovery of pay and Allowances for the period treated as Dies-Non.
19
DDO, MSTU
                 77,257
Overpayment of Pay and Allowances
20
                -DO-
                67,962
Excess Leave Salary
21
DDO,DIT (INV)
             1,40,991
Excess Drawal of Pay and Allowances
22
                -DO-
            3,37,230
HRA to be disallowed in respect of Shri Bhupendra K.Singh, ADIT
23
                -DO-
            1,93,924
Unauthorized Absence in respect of Sh. V.R. Pawar, DB
24
                -DO-
               52,120
Less recovery of CGHS
25
                -DO-
               60,212
Overpayment of Pay and Allowances due to unauthorized absence
26
DDO, Range-22(1)
              68,833
Excess Drawal of Pay and Allowances
27
                -DO-
              85,895
Overpayment of salary in respect of S.R. Javir, TA
28
                -DO-
             92,259
Overpayment of Salary in respect of Swapna Subodh
29
                -DO-
             90,228
Recovery of overpaid leave salary in respect of four officials.
30
DDO,DIT (IT)
          3,13,060
Recovery arising due to reversion of Sh. R.S. Bhaduria from sr. TA to TA
31
                -DO-
        1,90,885
Recovery of special allowance in respect of six Gr. A officers

32

DDORange-12 (1)
         
89,785

Excess Drawal of Pay and Allowances in respect of 11 officials.
33
                -DO-
         90,230
Less recovery of CGHS in respect of 104 officials
34
DDO,CIT-II PUNE
        56,908
Over payment of pay in respect of Sh. B.N. Tribhuwan, ITO
35.
AO/DDO, Navsari
50,000
Pay fixation – over payment
TOTAL
40,67,758





3.                Idle Machinery and Surplus Stores.
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
JCIT, Korba
            1,92,400
Five ACs were purchased in addition to the available 5 for the same rooms.
TOTAL
1,92,400



4.            Loss/Infructuous Expenditure.
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
CIT Ujjain
           63,567
Loss due to improper agreement of hired vehicle
TOTAL
63,567


5.                          Irregular Expenditure
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1.
ITO, Shivpuri
                   67,498
Excess expenditure against budget estimate
2.
ITO Balaghat
               3,00,000
Approval of HOD i.e. CIT not taken on file for hiring vehicle
3.
CIT (Audit) Bhopal
               2,69,041
Expenditure made out of wrong head for non availability of fund

4.

DDO,O/o the Addl. CIT, R-I & 2 Midnapore. (I.R.No.6)
              8,86,000

Irregular expenditure on hiring of vehicles during 2007-08, 2008-09,2009-10
5.
DDO/ITO,O/o the DCIT, Port Blair, A & N (I.R. No.7)
             2,88,199
Irregular expenditure on visit of Parliamentary Committee which was required to be borne from grants of Secretariat of Lok Sabha and Rajva Sabha.
6.
DDO, R-31, Kol (I.R. No.32)
            2,12,718
Expenditure incurred on civil works without obtaining sanction order of the competent authority.
7.
DDO, Safema, Mumbai
           4,19,100
Expenditure incurred for repairs and renovation for hired office
8.

           2,66,195
Outsourcing of Data Entry Work
9.
Addl. CIT, Range-I, Sambalpur
           1,45,198
Case of irregular expenditure of hiring vehicles
10.
DDO, Range-22(1), Mumbai
           8,77,561
GFR Rules not followed for the work of hiring of vehicles.
11.
ACIT, Gandhi Dham, Kutch, Gujarat
              88,374
Shortcoming in sub-vouchers/duplicate vouchers.
TOTAL
38,19,884


6.                       Irregular Purchase
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1.
JCIT, Korba
                5,70,125
Redundant procurement of store to exhaust budget to the tune of Rs.5,70,125/- The procurement has been made pushing aside the remarks of JCIT to put up the proposal to the purchase committee.
2.
CIT(Audit), Bhopal
                1,92,920
Limited Tender not invited, purchase splitted to avoid codal formalities
3.
DDO,R-25, Kol. (I.R. No.34)
                1,70,000
Violation of provisions in GFR in procurement  of goods
4.
DDO, CIT (ITAT), Kol. (I.R. No.41)
               2,89,323
                          -DO-
5.
CIT (Audit)
Bhubneswar
              2,26,213
Case of Irregular purchase private publication.
TOTAL
14,48,581



7.       Cases of Non-adjustment of Advances
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
CCIT, Bhopal
                   97,000
Temporary advance
2
CCIT, Bhopal
                2,43,250
LTC Advance
3
CCIT, Bhopal
         1,80,000
LTC Advance
4
ADIT, Bhopal
          1,80,000
LTC Advance
5
ITO (Admn) Gwalior
         2,00,000
              (app.)
TA/LTC Advance
6
Addl. CIT R-1 Raipur
             89,975
TA/LTC Advance
7
DDO, R-11, O/o the CIT-IV, Kol. (I.R. No.5)
             86,535
Non-adjustment of LTC Adv. For the financial 2008-09 & 2009-10
8
DDO, R-16, O/o CIT, Kol. (I.R. No. 11)
          2,16,270
Non-adjustment of LTC Adv. For the financial 2005-06, 2006-07 & 2007-08
9
DDO, DIT (INV), Mumbai
        2,59,000
Non posting of GPF advance/ withdrawals in r/o Gr. ‘D’ Staff
10
                -DO-
             62,136
Unadjusted Medical Advance
11
DDO, Range-22 (1)
          2,11,000
Non posting of GPF advance/ withdrawals in r/o Gr. ‘D’ Staff
12
DGIT(Intelligence) New Delhi
4,00,000
Advance of Rs.4,00,00/- for search operations drawn by Sh. Arun kumar Gujar, Jt. Director, but final adjustment bill not submitted till the date of audit.
13.
CIT-I, Rajkot, Gujarat
68,000
Non-adjustment of LTC advance.
TOTAL
22,93,166


8.             Cases of Blocking of Government Money
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
AO/DDO, App. Authority & Val Cell, Kol (I.R. No.39)
           8.59 Crores
Outstanding Acquisition of Properties  but not yer disposed since more than decades.
2
CIT, Kol-I, Kol (Para No.2, I.R. No. 21) P.D. Account No5055302013
             16,32,988
Seized cash lying in P.D. Account for more than decades without any valid reasons in violation of Rule 192 of R & P Rules
3
CIT, Kol-III, Kol, (Para No.3 I.R. No.22), P.D. accounts 5055302037
             27,11,366
             -DO-
4
CIT, Kol-IV, Kol (Para No.2, I.R. No. 23) P.D. Account No5055302044
             46,39,812
             -DO-
5
CIT, Kol-V, Kol (Para No.2, I.R. No. 24) P.D. Account No5055302051
             16,82,386
             -DO-
6
CIT, Kol-VI, Kol (Para No.2, I.R. No. 25) P.D. Account No5055302068
             15,21,934
             -DO-
7
CIT, Kol-VII, Kol (Para No.2, I.R. No. 26) P.D. Account No5055302075
             10,16,597
             -DO-
8
CIT, Kol-VIII, Kol (Para No.2, I.R. No. 27) P.D. Account No5055302082
             51,52,816
             -DO-
9
CIT, Kol-IX, Kol (Para No.2, I.R. No. 35) P.D. Account No5055302099
             84,98,537
             -DO-
10
CIT, Kol-I, Kol (Para No.2, I.R. No. 37) P.D. Account No5055302116
            39,29,514
             -DO-
11
DDO, Safema, Mumbai
            20,83,812
Bank Interest not deposited into Govt accounts
12
                -DO-
        2,74,15,900
Total value of Unsold Properties

13
             
  -DO-
        6,22,07,500

Delay in depositing the sales proceeds of forfeited properties into Govt. Account
14.
ACIT, Gandhi Dham, Kutch, Gujarat
71,842
Challans have not been entered in the Cash Book.
TOTAL
20,84,65,004




9.   Non-accountal of Costly Stores/Government Money
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
ADIT, Bhopal
                1,97,036
Non Accountal of Costly stores in dead stock
2
JCIT, Korba
                7,51,422
Stores nor been taken into account.
3
ITO, Itarsi
            Stock register is not being maintained
4.
Addl. CIT, Range-1, Raipur
8,94,701
Stock not taken into account.
TOTAL
18,43,159





10.   Any other Irregularities of Special Nature.
SL. No.
Name of Office
Amount
(in Rupees)
Brief Particulars
1
DDO, R-10, O/o CIT-IV, Kol (I.R. No.3)
       (-) 6.05 Lakhs
Difference of expenditure figures between ZAO, CBDT, Kol and DDO
2
DDO,O/o Addl. CIT, R-1 & 2, Midnapore (I.R. No.6)
          14.10 lakhs
                -DO-
3
DDO/ITO, New Alipurduar (I.R. No. 8)
           0.95 Lakhs
                -DO-
4
DDO/ITO, O/o DCIT,Port Blair, A& N (I.R. No. 7)
         14.30 Lakhs
                -DO-
5
DDO,O/o CIT (CO Systems), Kol. (I.R. No. 10)
          98.99 Lakhs
                -DO-
6.
DDO, O/o CIT-XIV, Kol. (I.R. No. 14)
           3.31 Crores
                -DO-
7.
Allhabad Bank, Nodal Br, Kol (I.R. No.17)
           1.33 Crores
Difference under PSB Suspense (Rev.)
8.
Bank of India, Nodal Br. Kol (I.R. No. 13) 
   (-) 15.02 Crores
                -DO-
9.
AO/DDO, Ward-I Coochbehar (I.R. No.15)
           0.62 lakhs
Difference of expenditure figures between ZAO, CBDT, Kol and DDO
10.
DDO, O/o DIT (Vig) Kol. (I.R. No. 18)
         10.09 Lakhs
                -DO-
11.
DDO, R-54, O/o CIT-XIX, Kol (I.R. No. 19)
         35.19 Lakhs
                -DO-
12.
CIT, Kol-IV, Kol, PD. Account (I.R. No.23)
            0.58 Lakhs
Difference in closing balance  between ZAO, CBDT, Kol and CIT, Kol-IV, Kol as on 31.03.2010
13.
CIT, Kol-VI, Kol, P.D. Account (I.R. No. 27)
          24.80 Lakhs
Difference in closing balance  between ZAO, CBDT, Kol and CIT, Kol-IV, Kol as on 31.03.2010
14.
DDO, R-31, Kol (I.R. No.32)
         30.55 Lakhs
Difference of expenditure figures between ZAO, CBDT, Kol and DDO
15.
CIT, Kol-IX, Kol P.D. Account (I.R. No.35)
            7.07 Lakhs
Difference in closing balance  between ZAO, CBDT, Kol and CIT, Kol-IX, Kol as on 31.03.2010
16.
DDO, R-25, Kol (I.R.No.34)
        30.17 Lakhs
Difference of expenditure figures between ZAO, CBDT, Kol and DDO
17.
Vijaya Bank Nodal Branch Kolkata (I.R. No.36)
         3.67 Lakhs
Difference under PSB Suspense (Rev.)
18
CIT, Kol-XI, Kol P.D. Account (I.R. No 37)



          6.63 Lakhs



        35.50 Lakhs
 Difference in closing balance  between ZAO, CBDT, Kol and CIT, Kol-XI, Kol.  as on 31.03.2010

Difference in closing balance between Bank Pass Book and accounts maintained by CIT, Kol-XI, Kol.
19
DDO, CIT 9 ITAT, Kolkata
 (I. R. No. 41)
        13.18 Lakhs
Difference of expenditure figure between ZAO, CBDT, Kol and DDO
20
Allahabad Bank, Mumbai
              4,15,728
Delay in remittance of amount Rs. 340177831/- inviting penal interes
21

          -DO-
              7,99,066
Non-Payment of penal interest
22
P.D. Account of DIT (INV)-II
          4,36,16,600
Delay in remittance to the Bank of seized amount
23
P.D. Account of CIT-2
             --------
Non-maintenance of Cash Book and Ledger

24
         
-DO-
            
--------

Missing cheque books and counterfoils
25
DDO,DIT (IT), Mumbai
             --------
No action taken against unauthorized absence for over five years in respect of three officials
26
DDO,DTRTI, Mumbai
             --------
Sh. G.S. Tambe was absent from duties since 1995. He was allowed to join duties on 11.11.2005 after a lapse of ten years without initiating action against the official under rule 11 of CCA Rules with Rule 32 & Rule 12 of Leave Rules which states that no government servant shall be granted leave of any kind for a continuous period exceeding five years
27
Addl. CIT, Range-1, Allahabad
             2,74,287
Excess credit under GPF Gr. ‘D’
28.
ACIT-I, Rajkot, Gujarat
19,80,000
Difference between ACIT and ZAO’s figure.
29.
DDO, DIT(IT), Mumbai
10,40,737
Purchase of office furniture without adhering to GFR Rules.

TOTAL
(-)2,36,39,582






ZONE-WISE DISTRIBUTION OF AUTHORISED BRANCHES 
Sl No. NAME OF THE ZAO R.B.I. STATE BANK  OF INDIA OTHER PSBS INCLUDING PRIVATE SECTOR BANK TOTAL NO. OF BANK BRANCHES
1 AGRA 66 71 137
2 AHMEDABAD 1 355 632 988
3 ALLAHABAD 87 107 194
4 AMRITSAR 59 191 250
5 BANGALORE 1 187 1031 1219
6 BHOPAL 351 330 681
7 BHUBANESWAR 1 176 119 296
8 CALCUTTA 1 267 625 893
9 CHENNAI 1 307 875 1183
10 COCHIN 1 63 414 478
11 DELHI 1 146 872 1019
12 HYDERABAD 1 311 787 1099
13 JAIPUR 1 77 420 498
14 JALLANDHAR 65 285 350
15 KANPUR 1 77 63 141
16 LUCKNOW 109 188 297
17 MEERUT 101 207 308
18 MUMBAI 2 112 849 963
19 NAGPUR 1 63 103 167
20 PATIALA 67 323 390
21 PATNA 1 210 179 390
22 PUNE 207 533 740
23 ROHTAK 73 231 304
24 SHILLONG 1 117 94 212
TOTAL 15 3653 9529 13197













RECEIPT ACCOUNTS AND MONITORING OF RECEIPTS

INTRODUCTION

The Central Board of Direct Taxes is a revenue oriented department.  Hence, separate ‘Accounts’ for Tax Receipts are maintained by the Reserve Bank of India, Zonal Accounts Offices and Office of Principal Chief Controller of Accounts.  ‘Receipt Accounts’ comprise Direct Tax collected/refunded through agency Banks and transactions routed through ‘Personal Deposit Accounts’ operated by Income Tax Department for amounts seized from tax evaders during search and seizure operations.

The Central Board of Direct Taxes (CBDT) is responsible for administering various direct taxes through the Commissioners of Income-tax located in different parts of the country.  The Commissioners of Income-tax are entrusted with the task of collection as well as refund of Income-tax and Corporation Tax, etc. under the Income-Tax Act, 1961.

The Principal Chief Controller of Accounts  is the apex authority of the accounting organisation of the Central Board of Direct Taxes.   Under the Departmentalised set up, the Pr.CCA, CBDT has been assigned the functions relating to accounting of all receipts and refunds pertaining to the Direct Taxes.  The Pr.CCA sits at New Delhi and operates through Zonal Accounts Offices (ZAOs) across the country.  Presently there are 24 ZAOs (in operation for ‘Receipt Accounts’) located at various places.

The various types of direct taxes collected by the Income Tax Department are classified under the following Major Heads:

Corporation Tax (C.T)                                    0020-Corporation Tax

Income Tax (I.T.)                                0021-Taxes on Income other than Corporation Tax

Wealth Tax (W.T.)                              0032-Taxes on Wealth

Gift Tax (G.T.)                                     0033-Gift Tax

Fringe Benefit Tax *                           0026

Banking Cash Transaction Tax #       0036

* Fringe Benefit Tax has been abolished w.e.f. assessment year 2010-11.
# Banking Cash Transaction Tax has been withdrawn w.e.f. 1st April 2009.

Since the departmentalization of accounts, a lot of changes have occurred in the procedures regulating the Direct Tax collection.  We have come a long way from the era of Treasuries and Sub-Treasuries to the state of the art technology.  The latest development in the field of collection of Direct Taxes is the implementation of “Online Tax Accounting System (OLTAS)”. 


ONLINE TAX ACCOUNTING SYSTEM (OLTAS)

The Government in September 2002 constituted a “Task Force on Direct Taxes” with the objective to rationalize and simplify the Direct Tax laws and redesign procedures to bring them at par with the best International practices so as to encourage voluntary compliance and reduce compliance cost. The Task force, under the Chairmanship of Dr. Vijay L. Kelkar who was the Advisor to the Minister of Finance and Company Affairs, submitted its recommendations to the Government in December 2002.  It was in accordance with these recommendations that the Tax Information Network (TIN) managed by National Security Depository Limited (NSDL) was established and the Online Tax Accounting System (OLTAS) saw the light of the day with effect from 1st June 2004. 

Main features of OLTAS

The cumbersome process of filling of four copies of challans has been replaced by a Single Copy Challan.  Prior to implementation of OLTAS, the taxpayers used to make payment of Direct Taxes through the ‘Receiving Branches’ authorised by Office of the Principal Chief Controller of Accounts and Reserve Bank of India by filling up four copies of challan. Two copies were retained by the Bank and other two copies duly stamped returned to the taxpayer (one to be kept as office copy and the other to be attached with annual return of Income Tax). The Nodal Branch used to consolidate the transactions of Receiving Branches linked to it and prepare two sets of scrolls and challans and transmit the same to Zonal Accounts Office and Regional Computer Center for accounting.  In the post-OLTAS scenario the ZAOs have become the sole repository of Single Copy Challan received in their office from the Nodal Branches of authorised Banks.  The Regional Computer Centre of the Income Tax Department gets the challan data through the Tax Information Network hosted by National Security and Depositories Limited.  Other features and advantages of the OLTAS are as under:-

v    Nodal branches do not have to wait for physical challans from receiving branches for preparation of Daily Main Scrolls. The Scrolls are prepared on the basis of challan data loaded to TIN by receiving branches.

v    Instead of sending physical challan/scrolls to Regional Computer Centers of Income Tax Department, the receiving branches of Banks Upload challan data to the Tax Information Network (TIN).

v    Faster remittance of tax collection to CAS, RBI, Nagpur.

v    The taxpayers need not retain two copies of challans with them as the requirement of enclosing copy of challan with Annual Income Tax Return, as proof of payment of tax, has been done away with.

v    Income Tax Department affords credit to the taxpayer on the basis of information available on TIN.

v    The taxpayers have been provided the facility of paying the Direct Taxes through Internet from the comfort of their houses, workplaces or from any convenient internet access point.

v    Permanent record of Challan Identification Number (CIN) in the Bank Statement / Passbook, if payment made through the mode of Internet.

v    Zonal Accounts Offices account for the tax collection on the basis of the single copy challan/scrolls submitted by the Nodal branches of the Agency Banks.

v    Levy of Penal Interest if tax collection does not reach Government Account within T+3 days.  However, this was held in abeyance till 31st of March 2005 with the modification that the remittance period would be T+3 working days for the Public Sector Banks.  As the transactions are closed at the RBI at 1 P.M., it has now been decided by the Controller General of Accounts that the permissible period indicated would not include the Put Through Date at RBI for calculating the T+3 working days in respect of Public Sector Banks only. In respect of e-payment of Government transactions, RBI in consultation with O/o CGA has decided that the remittance in respect of private sector banks for all Govt. transactions including EASIEST & OLTAS  receipts through e-payment will be T+1 working days (including put through date) w.e.f. August 1, 2008.  In case of Public Sector Banks the remittance period will be T+2 working days (excluding put through date) w.e.f. August 1, 2008, T+1 working day (excluding put through date) w.e.f. January 1, 2009 and T+1 working day (including put through date) w.e.f. 01.11.2010.

v    Regional Computer Centers submit the Detailed Accounts to the Zonal Accounts Offices on the basis of data available on the TIN.

v    Zonal Accounts Offices have been provided the facility to access the NSDL site through which they are able to view the challans/scrolls uploaded to TIN and take up the matter with Banks/Income Tax Department, if the data loaded to TIN does not match with  the tax collection reported to them through physical challans/scrolls.

v    All the ZAOs have been allotted e-mail IDs through NIC and Reserve Bank of India has been requested to issue instructions to all Agency Banks to forward soft copy of Daily Main Scroll to ZAOs to facilitate them to compile Flash Figures of direct tax collection without waiting for physical challan/scrolls from the Banks. Office of Controller General of Accounts has been approached to allow accounting of direct tax collection on the basis of soft copy of scroll as the same will be replica of the hard copy of scrolls received with challans.

v    Reserve Bank of India has allowed access to their web site through which the ZAOs can view the amount of put-through to Government Account by Agency Banks  on day to day basis without waiting for ‘Monthly Closing Statement’ from RBI.

v    It has been decided in consultation with the Income Tax Department to introduce Computer Generated receipts for challans payment of OLTAS transactions, w.e.f. June 1, 2008 with the following features:-

·         Maker Checker System of Data Entry
·         Software Alert
·         Software Validation
·         Quality Assurance at Bank level
·         Re-upload of rejected file

REFUND OF TAXES

Income Tax Refund Orders are payable at the Reserve Bank of India, State Bank of India and the associate Banks of the SBI where SBI Branch is not available.  However, the Reserve Bank of India has decided to exit the business of handling Income Tax Refund Orders.  There are 722 refund bank branches of State Bank of India and its associates.

On receipt of Advice of Refund from the Income Tax Department (Refunds for Rs. 10,000/- and above) the authorised bank branches make payment of the Refund Order presented by the assessee.  For Refunds below Rs.10,000/- Refund Advice is presented by the assessee along with the Refund Order.  Subsequently, RBI reimburses the refund amount to the Banks.  The Reserve Bank of India, on its part, sends ‘Monthly Closing Statements’ of Refunds incorporating these transactions to the Banks (Link Cells at Nagpur and GAD, Mumbai in respect of SBI), and the ZAOs for accounting and reconciliation of figures. 

RECENT INITIATIVES ON THE TAX COLLECTION FRONT

PAYMENT OF DIRECT TAXES THROUGH INTERNET
           
A system of payment of Direct Taxes by the assessees over ‘Internet’ under the On-Line Tax Accounting System (OLTAS) was initiated and put in place in ‘2005. The Technical Committee constituted by the High Powered Committee on OLTAS to examine the issue of Direct Tax payments being made over the Internet had since finalized a Concept Paper on Electronic Payment of Taxes through Banks having Internet Banking facilities.  As per the Concept Paper, National Securities and Depositories Limited (NSDL) will provide the data screen for entry of challan details and validate the same against the PAN/TAN database, codes of Major Heads/Minor Heads, types of payment, etc.   NSDL will also provide a secured link between its website and the website of the participating Bank.  Accordingly, NSDL had informed all the Banks participating in OLTAS about the system becoming operational giving the technical document on Internet payment.

The concept paper on this subject circulated by the Indian Banks’ Association (IBA), outlining the main features of the system is as follows (for reference)

“Concept Paper on Electronic Payment of Taxes through bank having Internet banking facilities”

Income-tax Department through Tax Information Network (TIN) will provide a screen at its website for the taxpayers to fill up electronic challan in the prescribed proforma.  It will be mandatory for the taxpayers to quote PAN/TAN, Name and address of the taxpayer, Assessment Year, Major Head, Minor Head, type of Payment, etc. The system will validate the PAN/TAN against the database of PANs/TANs and also ensure that other particulars are filled up properly with valid codes. Once the data is validated, a drop down menu will appear indicating the names of various bank offering internet payment facilities. The taxpayers can opt for any of these banks in which he has an internet account.  A link will transfer the data to the web of the selected bank. The tax payer will be able to fill in the payment details and amount on the bank’s website. After satisfying himself of the correctness of the particulars, the taxpayer will complete the transaction using the internet username and password allotted to him by his bank.

On completion of the transaction, the taxpayer will have an option to download the counterfoil from the website of the bank. This will contain all details available that are usually given in the hard copy of the counterfoil including Challan Identification Number (CIN).  The scheme has been rolled out and is in place with well-defined roles for TIN, Agency Banks & Zonal Accounts Offices.

REFUND BANKER SCHEME   

As a step towards obviating delays in the receipt of Refund Orders by the assessees, the Income Tax Department (ITD) initiated a pilot on the concept of “Refund Banker” in certain selected circles in Delhi and in Patna and in further circles in Mumbai, Kolkata, Chennai & Bangalore from 01.10.2007, for the purpose of implementing the scheme of “Refund Banker” through the State Bank of India (SBI).

The scheme was further extended to the non-corporate assessees in eight more cities of Ahmedabad, Hyderabad, Bhubaneshwar, Pune, Kochi, Chandigarh, Allahabad and Trivandrum w.e.f. 01.10.2009 and has been subsequently extended on pan-India basis.   SBI, CMP Branch, Mumbai is acting as the “Refund Banker”.
           
A Committee was constituted under the Chairmanship of Member (Revenue), CBDT for working out the modalities for implementation of the Scheme of “Refund Banker” for the Income Tax Department, of which Pr. CCA (CBDT) is one of the five members.  It was constituted to examine all issues relating to implementation of the scheme as a pilot project including:

§  Selection of the bank,
§  Cost to the Department,
§  Issues of pre-funding,
§  Issues of security of refund,
§  Issues of accounting of refunds,
§  Record management, and
§  Submission of periodic report/recommendations to CBDT, etc. 

On receipt of encoded file from ITD, SBI, CMP branch processes the refunds and issues drafts or funds transfer on case to case basis.  The scrolls/DMS are sent to respective ZAOs by CMP branch and accounting of refunds is done by ZAO on this basis.

PAYMENT OF DIRECT TAXES THROUGH ATM

To ease the process of tax-payment further, CBDT initiated ‘payment of direct taxes through ATMs’ utilizing ATM-cum-Debit Card of authorized/agency banks.

The process of tax payment through ATM involves 2 stages. In the first stage, the tax payer who is a debit card holder will register with the agency bank, subject to normal validation checks. After registration, a template with a display label will be created. For each sub-head, there will be single registration leading to a single display label. In second stage, tax payer inserts the debit card in ATM machine and makes the payment as per the displayed label.

The ATM payments will be treated as e-payments as per the provisions of the CBDT Circular number 5/2008 dated 14th July 2008. Therefore, the reporting and remittance discipline as applicable for the e-payments will be applied to the ATM tax payment also.

BENEFITS OF PAYMENT OF TAX THROUGH ATM

·         Ensure immediate credit to the Govt. Account of the Taxes paid by the taxpayer;
·         Faster and easier linking of challan payments with the returns;
·         Good quality tax payment data will be generated. This will enable efficient credit of taxes while processing returns;
·         No requirement of filling of physical challan – paperless facilitation of tax payment. This will lead to error free tax payment data as manual intervention for repetitive transaction is eliminated;
·         Instant CIN intimations to taxpayers confirming tax payment;
·         Tax payment can be done in all 365 days and on 24X7 basis;
·         Tax payment data would be automatically validated data with nearly 0% error in PAN quoting. This would help in easy matching of tax payment with the returns being filed by the corresponding taxpayers;
·         Since the account statement of the tax payer would also contain details of the tax payment, including CIN of the taxpayers, a permanent record of the tax payment having made through this mode would be available with taxpayer. This would enable reconciliation, on later date if and when need arises;
·         This system will also pave the way to bring the small and medium taxpayer under the ambit of e-payment and relieve the stain on tax payments involving physical challans as well.


CHALLAN CORRECTION MECHANISM BY BANKS (ONLY FOR PHYSICAL CHALLANS) RECORD TYPE - RT(18)
         
At present, through a functionality termed RT 08, banks were permitted to correct data relating to three fields only i.e. amount, major head code and name. The other errors could be corrected only by the assessing officers. Thus, in the current scenario, even after the taxpayers/banks realize their mistakes in submitting/feeding erroneous challan data they could not make any changes.

As remedy to this situation for physical challans, a Challan Correction Mechanism termed RT-18 has been rolled out effective from 01.09.2011. Under this mechanism, a window/staging period to banks has been allowed to correct the errors in the OLTAS data after it is uploaded to NSDL database. For this purpose the banks will be required to upload corrections in challan data including those requested by taxpayers, in separate file in the same manner in which they upload challan data to TIN and to the concerned Zonal Account Offices (ZAOs) electronically.

REVENUE ACCOUNTING MANAGEMENT SYSTEM [RAMS]
[CONCEPTUALISATION & FUNCTIONAL OVERVIEW]

EVOLUTION

The Principal Chief Controller of Accounts heads the accounting organization of the Central Board of Direct Taxes and he is responsible for accounting of both Expenditure & Revenue (Direct Taxes) on monthly basis through field formations i.e. Zonal Accounts Offices (ZAOs) spread all over the country.

The Office of Controller General of Accounts has taken a lot of initiatives for computerization of Expenditure accounts through COMPACT & e-lekha.  At present the expenditure account is being compiled through COMPACT at all the 24 ZAOs successfully and uploaded on ‘e-lekha’ regularly.  Further, since CBDT is revenue oriented department, separate accounts for tax receipts are being maintained by the Office of the Pr. Chief Controller of Accounts.

Revenue Account comprises Direct Taxes collected/refunded [both via ‘physical’ & ‘electronic’ mode i.e. internet collection] through authorized agency banks/branches and transactions routed through Personal Deposit Account operated by Income Tax Department for amounts seized from tax evaders during Search & Seizure operations.

Revenue Accounts of Direct Taxes are compiled in Zonal Accounts Offices (ZAOs) Major head-wise from the Daily Scrolls and Date-wise Monthly Statements (DMS) received from the Nodal Branches of all the authorized agency Banks.  The procedure for acceptance of taxes at the receiving branches, preparation of scrolls by the collecting branch, functions of Nodal Branch & the erstwhile procedure of action to be taken by Zonal Accounts Office for accounting of Direct Taxes has been elucidated in Civil Accounts Manual [the extract of which has been reproduced earlier in this volume].

The Income Tax Department initiated the computerization of revenue collection through OLTAS i.e. Online Tax Accounting System w.e.f. June, 2004.  But accounting of revenue by ZAOs was being done on the basis of computer generated printouts of scrolls/DMS submitted by agency banks and for Detail Account we were dependent on Designated Officer/Regional Computer Centre of Income Tax Department, which was made available only after a gap of almost 5-6 months.

To be in sync with I. T. initiatives taken by the Income Tax Department, the agency banks and O/o CGA for revenue collection & computerization of accounts, the need arise for developing an application/software to align the Information Technology with business rules of ZAOs and bringing efficiency in various processes performed in ZAO offices.

 Thus was born “Revenue Accounting Management System [COMPACT (RAMS)]” – an offline revenue accounting package – developed by N.I.C.

CONCEPTUALISATION

In view of large number of challans involved, it was not possible for ZAOs to compile challan-wise account with detailed classification at the first stage.
Moreover, since the banks had already digitized the challan information at the first point of contact i.e. at the dealing branch/receiving branch level, therefore, a process was conceptualized whereby the challan information’s could be made available to the ZAOs in a digitized form from the Nodal Branches.

The Office of Pr. CCA, CBDT conducted pilots by taking data directly from banks for almost a year.  Various file formats for physical payments, e-payments, refund banker, scroll formats and error scroll formats were designed and sent to all the banks for orienting their Information Technology department to provide all direct tax receipts and refunds data in the prescribed format on daily basis.

Subsequently, all the authorized banks were directed to upload all the direct tax receipts and refunds data on a centralized web-server on daily basis.  The web-server sorts the file pertaining to various ZAOs and serves them to the concerned ZAOs.  This office has further automated the ‘Put-Through’ from Reserve Bank of India.  RBI now sends an electronic file indicating the put-through of all the Nodal branches, Major Head-wise & Bank-wise.

FUNCTIONAL COVERAGE

The COMPACT (RAMS) software is at the lowest level of revenue accounting and it provides information to higher levels of accounting systems for further processing.  The software covers all the major revenue accounting functions i.e. compilation, bank reconciliation and consolidation of accounts.  It supports batch uploads and integration of day-end revenue data to a central database which drives the web-enabled application ‘e-lekha’ for financial management.

INFORMATION INTEGRATION
·         It will capture the accounts data from the original source i.e. the challans from the banks to improve the quality of data used for compilation and consolidation of accounts.

·         Functional interfaces among various modules to enhance data integrity and to enforce process validations.

·         Electronic incorporation from text files i.e.

Ø  The challans received from various banks can be incorporated in the Compilation Module;
Ø  Daily receipt/payment scroll can be incorporated in the Compilation Module;
Ø  Daily Summary scroll can be incorporated in the Compilation Module;
Ø  Monthly Summary scroll can be incorporated in the Compilation Module;
Ø  Reserve Bank’s ‘put-through’ is incorporated in the Compilation Module.

OPERATIONAL EFFICIENCY

The operational efficiency of the accounting processes will be improved due to proper validations, speed, user-friendly interface and security features.

Ø  Vital checks and validations for the incorporation of challans;
Ø  Online reconciliation of challans during bank scroll entry;
Ø  Mapping of all valid combinations of 13-digit function-head with 2-digit object-head and 1-digit category.  This is further mapped to the 3-digit demand for grant and 6-digit DDO code;
Ø  Second level of mapping of accounting codes of the CGA’s organization with that used by the Income Tax Department for classification of different challans;
Ø  Access to the software for authorized users;
Ø  Pre-defined access rights to the users of the forms and reports of the application;
Ø  Client/Server application with multi-user facility;
Ø  Locking of MS-SQL server instance running COMPACT (RAMS);
Ø  Encrypted back-up option through software.



PREPARATION OF ACCOUNTS

The Government Accounting System encompasses various stages from recording the initial transactions in challans and refund vouchers to the preparation of Annual Accounts. The monthly accounts are compiled by the Zonal Accounts Offices on the basis of challans submitted by the Agency Banks with scrolls and submitted to Principal Accounts Office. The Principal Accounts Office consolidates the Accounts received from all the ZAOs and sends the same to the Office of Controller General of Accounts.  The Annual Accounts and Appropriation Accounts are audited and certified by the Comptroller and Auditor General (C&AG) of India and subsequently placed before the Parliament as a constitutional requirement.

The flow of Accounting Data to the Parliament is shown in Chart 2.2 and to the Principal Chief Controller of Accounts, Central Board of Direct Taxes in Chart 2.3.

HIGHLIGHTS OF THE DIRECT TAX COLLECTIONS DURING 2010-11

During 2010-11, the gross collection of Direct Taxes upto March, 2011 (including J.E. accounts) was Rs.5,22,139.80 crores (including CTDS upto March, 2011 (Sy-II.)).  These figures include the Tax Deducted at Source (CTDS) by all Departments/Ministries of the Central Government.  CTDS figures are not reflected in the books of RBI, as they do not follow the banking channel.  However, in respect of Tax Deducted at Source (TDS) by the Accountant General (AGs) in the State Governments, the figures are reflected in ZAOs Accounts.  The hike in net collection in 2010-11 over the collection of 2009-10 is Rs. 68871.16 crores in terms of quantum and 18.22 in terms of percentage. ZAO wise collections are shown in detail in Statement 2.1 & Chart 2.4

BANK-WISE COLLECTION OF DIRECT TAXES DURING 2010-11

(Base: RBI Report)

The top ten Banks in terms of gross collection of Direct Taxes during 2010-11 were following:

Sr. No.
Name of the Bank
Amount [in crores of Rs.]
1
State Bank of India
  156277.29
2
HDFC Bank Ltd.
     98980.35
3
IDBI Bank Ltd.
     70300.57
4
AXIS Bank Ltd.
     48757.79
5
ICICI Bank Ltd.
     22411.80
6
Corporation Bank
     16105.24
7
Punjab National Bank
     10758.63
8
Bank of Baroda
     10362.22
9
Bank of India
       8933.56
10
Union Bank of India
       7989.18


Thus, State Bank of India accounted for 30.33% of gross Direct Tax collection during 2010-11.  The Bank-wise collection is shown in the Statement 2.2 and Chart 2.5.  Chart 2.6 reflects the collection made by top six Banks and the rest.  The State-wise collection and refund of Direct Taxes are shown in Statement 2.3 and Chart 2.7.

MONITORING SYSTEM FOR REVENUE RECEIPTS

Principal Chief Controller of Accounts, CBDT, New Delhi monitors the receipts and remittances of Direct Taxes.  This mammoth task is completed with the help of 24 Zonal Accounts Offices (operational for Receipt Accounts) spread through out the length and breadth of the Country.  The monitoring process starts on the receipt of scrolls & the challans from the Nodal Branches of the designated Banks.

v    The ZAOs monitor the remittance of Direct Taxes from the date of its receipt in the Bank branch to the date of the final put through at Central Accounts Section, Reserve Bank of India, Nagpur. During 2010-11, the collection and reporting procedures have gone high-tech.  The On Line Tax Accounting System (OLTAS) has been implemented with effect from 1st June 2004.  The time prescribed for the remittance of the Direct Taxes to CAS, Reserve Bank of India, Nagpur was first reduced to T+3 days (inclusive of Sunday and holidays) but later on it was retained at the pre-OLTAS level for the year 2004-05.  With effect from 1st of April 2005 the prescribed time has been fixed at T+3 working days. As the transaction are closed at the RBI at 1 P.M.  It has now been decided by the Controller General of Accounts that the permissible period indicated would not include the Put through Date at RBI for calculating the T+3 working days in respect of Public Sector Banks only. The time limit for the Private Sector Banks was retained at T+3 days inclusive of Sunday and holidays.   If the collections failed to reach the Government Accounts at Nagpur within the prescribed period, interest was levied for the entire period of delay i.e. from the date of realization of the instrument or receipt of cash to the date of Final Put Through at CAS, Reserve Bank of India, Nagpur.

v    The remittance period in respect of all government transactions made through e-payments in respect of Public Sector Banks and Private Sector Banks will be T+1 working day (including put through date) w.e.f. November 1, 2010.

With the implementation of OLTAS, there are no penal delays.  The collections that were not remitted to Government Accounts within the prescribed period were brought under the category of penal clauses. 

The Controller General of Accounts had appointed a Committee to review the expeditious movement of all categories of Government revenues to its exchequer and other related issues. Based on the recommendations of the aforesaid committee, it has been decided as under:-

1.                  Applicability of exclusion of put through date for the transactions (relating to revenue receipts) affected during the period 1.05.2005 to 31.12.2006 for the cases in which penal interest has already been paid.
2.                  Permissible period for remittance of Government revenues into Government account for outstation transactions under Electronic Accounting System in Excise and Service Tax (EASIEST).
3.                  Levy of petty amount of penal interest on delayed remittances of Government receipts.
4.                  Waiver of penal interest due to the teething problems experienced by dealing branches during the initial period of OLTAS.
(Reference CGA’s OM No.S-11012/3/P.Intt(RP).CGA/2007/RBD/499 dated 06.04.2009)

In continuation of the above, the following decisions have also been taken by CGA:-

1.                  A period of T+12 working days (excluding put through date & where T is the day when is money available to the branch), is allowed with effect from 01.01.2010 to Public Sector banks for manual remittance of Government receipts to CAS (RBI) in respect of branches located in Jammu & Kashmir, Leh, Uttarakhand, Himachal Pradesh, Sikkim, North Eastern Region (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura), Jharkhand and Chhattisgarh.
2.                  The past cases, if any, pertaining to the period from 01.01.2007 to 31.12.2009 may be considered for relation of permissible period in respect of difficult/remote areas, on case to case basis.
3.                  These revised norms for remote, difficult and hilly areas will not be applicable to Private Sector Banks.
(Reference CGA’s OM No.S-11012/3/P.Intt(RP).CGA/2007/RBD/304 dated 24.02.2010)

The interest continues to be imposed by the ZAOs and intimated to the Banks.  The cases of delay of more than Rs. 1.00 crore were reported to Headquarters for further action.

An effective system of reconciliation of receipts has been put in place.  The designated Banks are required to certify on monthly basis that they have reconciled the receipts with their Receiving Branches.  However, instances of delays in the reconciliation process have been noticed from time to time. 

Local Monitoring Committee Meetings & Apex Monitoring Committee Meetings for each zone are held at the level of ZAOs and Pr. CCA respectively at six monthly & annual intervals to review the performance of authorized banks in the collection, remittance and reconciliation of Direct TaxesThe deficiencies observed with respect to the individual Banks are highlighted in these meetings and corrective measures are suggested. Effective Monitoring of the remittance process by office of the Pr. CCA, CBDT and the implementation of OLTAS has paid rich dividends.  The overall delays in the year 1995-96 were 19.30% of the gross collection.  The average period of delays was 6 days.  Due to the measures enumerated above, the delays as on 31.03.2011 stood at approximately 0.19% of the gross receipts.

It would be relevant to mention here that the total number of ZAOs has come down from 25 to 24 since the inception of departmentalized accounting system in 1977-78.  On the other hand the administrative Chief Commissionerates of Income Tax (CCITs)/ Commissionerates of Income Tax (CITs) have gone up from 24 to 116 in the corresponding period.  The number of authorized Bank Branches has gone up from 5104 in 1977-78 to approximately 12410 in 2010-11, which is more than 143.14% increase.  Statement 2.8 shows the break-up of the total number of 12410 branches of RBI, SBI, other Public Sector Banks and Private Sector Banks collecting Direct Taxes, corresponding to each ZAO.  It may be seen that SBI alone accounts for approximately 27.65% of the total number of authorized Bank branches.

Statements 2.9, Chart 2.10 & 2.11 show the year-wise increase the number of authorized Bank branches as well as that of the total number of Chief Commissionerates of Income Tax (CCITs) and ZAOs.

The total Direct Tax Collections have increased from Rs. 2600 crores in 1977-78 to Rs.4,46,934.47 crores (Net) in 2010-11 with the number of challans + ITROs received in ZAOs going up from around 50 lakhs in 1977-78 to more than 2.99 crores in 2010-11.  However, the staff strength of ZAOs has grown marginally from 925 in 1977-78 to 961 in 2010-11.

The ZAOs have achieved result in such a scenario due to a relentless drive to enhance the efficiency of the staff of Pr. CCA, CBDT along with an unfailing commitment towards computerization and modernization of work processes.




Statement No.2.8
ZONE-WISE DISTRIBUTION OF AUTHORISED BRANCHES
Sl No.
NAME OF THE ZAO
R.B.I.
STATE BANK  OF INDIA
OTHER PSBS INCLUDING PRIVATE SECTOR BANK
TOTAL NO. OF BANK BRANCHES
1
AGRA

65
74
139
2
AHMEDABAD

347
598
946
3
ALLAHABAD
1
83
95
178
4
AMRITSAR

59
142
201
5
BANGALORE
1
184
1013
1198
6
BHOPAL

240
393
633
7
BHUBANESWAR
1
176
101
278
8
CALCUTTA
1
255
655
911
9
CHENNAI
1
302
853
1156
10
COCHIN
1
61
375
437
11
DELHI
1
135
820
956
12
HYDERABAD
1
301
733
1035
13
JAIPUR

75
409
485
14
JALLANDHAR
1
64
226
290
15
KANPUR
1
74
56
131
16
LUCKNOW

106
155
261
17
MEERUT

98
195
293
18
MUMBAI
2
99
828
929
19
NAGPUR
1
61
91
153
20
PATIALA

65
230
295
21
PATNA
1
194
164
359
22
PUNE

206
499
705
23
ROHTAK

70
184
254
24
SHILLONG
1
112
74
187

TOTAL
15
3432
8963
12410