"172 cases involve under-charging of Rs 708.6 crore (Rs 7.08 billion) and 11 cases involve over-charging of Rs 171.3 crore (Rs 1.71 billion)," the Comptroller and Auditor General (CAG) said in its report tabled in Parliament.
According to the apex auditor, while Bharti Cellular was under-charged Rs 12.3 crore (rs 123 million), the same for State Bank of India (SBI) was Rs 38.2 crore (Rs 382 million). Besides, Tata Sons paid Rs 21.9 crore (Rs 210 million) less than what it owed and Mahindra and Mahindra Rs 7.2 crore (Rs 72 million).
The report mentions that SBI was allowed deduction of Rs 230.4 crore (rs 2.3 billion) in respect of the amount transferred to special reserve. The IT Act allows deduction of 40 per cent of profits earned from long term finance, for creation of special reserves, which for SBI works out to Rs 117 crore.
"The mistake resulted in excess deduction of Rs 113.4 crore (Rs 1.13 billion) involving short levy of tax of Rs 38.2 crore," it said.
Further, Bharti Cellular made a provision of Rs 154.6 crore (Rs 1.54 billion) for doubtful debts, of which Rs 33.3 crore was accounted for in Balance Sheet and allowed as deduction. "...a mistake which led to potential short levy of tax of Rs 12.3 crore," the report said.
"The IT Act provides for disallowing the entire amount in the provision as it was not the actual expenditure. There has been exigencies by corporate and the government will now initiate action," a CAG official said.
The IT department or the CBDT will now have 4-6 years time, depending on the company type, to recover the undercharged amount. For Tata Sons "the MAT payable (Rs 203.7 crore) was more than the tax payable under normal provisions (Rs 184.8 crore), the Assessment Officer did not levy MAT."
The omission resulted in a short levy of tax of Rs 21.9 crore (Rs 219million), the report said. "It is our opinion that clarity in the ACT would enhance transparency, consistency in assessments and also reduce litigation, thus reducing the cost of compliance," it added.
In case of M&M, a bad debt to the tune of Rs 15.1 crore (Rs 151 million) was not written off in the books of accounts, although it was allowed for deduction. This led to a short levy of tax worth Rs 7.2 crore (Rs 72 million), including interests.