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| IT Deptt seizes bank account, ask officials to reimburse taxes by Feb 28 | | Tax evasion scandal surfaces in R&B | | Bashir Assad
Early Times Report
Srinagar, Feb 3: Tax evasion scandal to the tune Rs 19 crore has surfaced in Roads and Buildings (R&B) Division-I of the Public Works Department in Jammu. The Income Tax headquarters Chandigarh has seized the accounts of the division. The IT Department has directed the division to reimburse the taxes by or before February 28.
Tax evasion, until now, was synonymous with the politicians and big business houses. IT officials say it is highly disappointing that the R&B Division-I of Jammu has fraudulently evaded taxes on the amount released against projects done during last the three years. The total amount of tax evasion was assessed by the IT department to the tune of Rs 19 crore.
Early Times learnt from the reliable sources that the R&B division-I Jammu, during the past three years, has allotted works on the recommendations of the ministers to their blue eyed boys without submission of their PAN card and in some cases, even without contract cards.
Sources said the R&B Division has deducted the outstanding tax from the contractors at the rate of 2.25 per cent. These were the ineligible contractors who were supposed to pay the taxes at the rate of 20 per cent for not possessing PAN cards.
Sources said the works to the tune of Rs 200 crore were allotted to petty contractors without inviting tenders. This was done on the recommendations of the then ministers from Jammu region.
It is learnt that after the local IT officials detected a fraud in the R&B Division's accounts, they immediately referred the case to IT headquarters Chandigarh.
The IT headquarters summoned the concerned Executive Engineer on January 15 this year and directed him to settle the accounts before February 28, 2015. The accounts of the division were immediately seized, and no transactions are being currently made from the account.
According to the IT officials the R&B Division should have realized Rs 19 crore from the contractors by taxing them at the rate of 20 per cent. However, in violation of the set procedure for taxation, the division realized only Rs 2 crore from the contractors against the works executed by them, without demanding their PAN cards.
This, according to the officials, has resulted in a loss of Rs 17 crore to the state exchequer.
An examination of the official documents reveal that in the past three years, the R&B Division-I has undertaken scores of works without inviting tenders. These were allotted to contractors without demanding their PAN cards at the time of tax deduction. This blatant flouting of rules has raised a question mark on the financial dealings of the division, as the works executed in violation of codal formalities amounts to crores of rupees.
Sources in R&B department said that hundreds of minor and major works (roughly 300) have been undertaken in the division-I in the past three years without inviting tenders.
In most cases, the rates for these works were fixed by the Executive Engineers who served the division during past three years.
While officials cite "exigency" for carrying out works departmentally, sources contest the claim, asserting that the works were allotted arbitrarily to favourites in the garb of exigency.
"Under rules, there may be a provision to carry out some works departmentally in case of emergency situations like floods, heavy snowfall or any other natural disasters. But if you go through all the executed works, you will find that most of them didn't deserve to be carried out on emergency basis when compared with other works which are unexecuted till now," said an official.
Officials believe that executing works without tendering process has become a routine in R&B Division-I and II. This is being done for the reason that ministers and legislators force the officials to accommodate their contractors.
When contacted the Superintending Engineer Jammu, SP Manhas admitted that the taxes have been deduced at the rate of 2.25% from the contractors who do not qualify for such relaxation, since they don't possess PAN cards issued by the IT department.
He said the gap in tax collection in the division is to the tune of Rs 9 crore. Manhas said that the division is in the process of correcting the errors.
He added that the concerned Executive Engineer has informed the department that the gap in tax collection is now running into lakhs, not crores. |
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