New Delhi [India], August 13 (ANI): The Comptroller and Auditor General of India (CAG) has flagged delays, incorrect tax calculations, rejected eligible applications and revenue losses in the implementation of the Direct Tax Vivad se Vishwas (DTVsV) Scheme, 2020.
According to a press release issued by the Office of the Comptroller and Auditor General of India, the Audit Report on Direct Taxes, titled "Direct Tax Vivad se Vishwas Scheme, 2020", was presented in Parliament on Thursday.
According to the release, the CAG conducted a Subject Specific Compliance Audit (SSCA) of the scheme between July 2023 and February 2024, while issues related to information technology implementation were examined between March and September 2024. Audit findings were discussed with the Central Board of Direct Taxes (CBDT) in September 2025.
The scheme was introduced to reduce pending income tax litigation, facilitate timely revenue collection and provide taxpayers with certainty, savings in time and resources, and immunity from penalty and prosecution, the release said.
As of January 31, 2020, disputed direct tax arrears amounting to Rs 10.09 lakh crore were locked in 4.15 lakh appeal cases, equivalent to 88.7 per cent of direct tax collection of Rs 11.37 lakh crore during FY 2018-19.
The audit covered 5,212 cases across different categories pertaining to 174 Designated Authorities (DAs).
The CAG found that in 63 per cent of audited sample cases across 24 states, Form-3 was issued beyond the prescribed 15-day period, with delays extending up to 868 days, according to the release.
Similarly, among 4,558 cases where Form-5 was issued, delays were found in 2,044 cases, or 45 per cent, across 22 states. The delays extended up to 954 days.
The release said the Department did not provide details of Consequential Effect Orders (CEOs) in 2,521 cases. Of the 2,037 cases where CEOs were made available, 1,546 had delays extending up to 1,398 days.
The audit also found that in 10 cases across three states, valid declarations were rejected by the Designated Authority despite the assessees being eligible for the scheme.
According to the CAG release, 208 cases involving a tax effect of Rs 423.47 crore had incorrect determination of the amount payable under the scheme. In another 55 cases involving a tax effect of Rs 1,168.27 crore, interest paid to assessees under Section 244A of the Income Tax Act was not withdrawn while processing the cases, resulting in loss of revenue to the exchequer.
The audit also highlighted deficiencies in internal audits and the absence of standard operating procedures across several Principal Commissioners of Income Tax (PCsIT).
The release said that of 4.15 lakh cases involving Rs 10.09 lakh crore pending before appellate forums, applications covering 1.32 lakh cases involving Rs 0.99 lakh crore were received under the scheme. As of July 22, 2022, 1.06 lakh cases had been settled and Rs 71,924 crore collected.
The CAG recommended that the CBDT fix specific timelines for issuing forms and CEOs, strengthen IT controls, ensure accurate computation of payable tax, improve uniformity in application of provisions and issue standard operating procedures for future schemes.
The CAG also recommended stronger internal audits and verification of assessment records before refunds are issued to prevent revenue loss, the press release said. (ANI)
Direct Tax Vivad Se Vishwas scheme: CAG flags delays up to 1,398 days, incorrect tax calculations
