CAG identified 1,902 tax assessment lapses with a total tax effect of Rs 25,085 crore
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CAG flags Rs 25,085 crore tax effect from 1,902 assessment lapses
The Comptroller and Auditor General (CAG) flagged 1,902 tax assessment lapses with a tax effect of Rs 25,085 crore, primarily involving incorrect tax rates and faulty income computations. Most lapses occurred in the 2017-18 assessment year, post-demonetisation, where assessing officers failed to apply relevant sections in unexplained transaction cases, leading to widespread under-assessment. This highlights systemic gaps in tax administration and scrutiny mechanisms, making it a critical topic for economy and governance sections in competitive exams.
Source: Economic Times. This summary and analysis are AI-written from that report and are not individually fact-checked — confirm names, dates and figures with the source before you rely on them.
Revision structure
Key points
Exam-ready takeaways
Majority of lapses pertained to Assessment Year 2017-18, following demonetisation (Nov 2016)
Key issues: incorrect tax rates applied and faulty income computations by assessing officers
Assessing officers failed to invoke relevant sections in unexplained transaction cases
Resulted in under-assessment of tax in most identified instances
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