Property transactions of Rs 15,460 crore identified by CAG wherein PAN was not quoted
To strike at the root of black money, the government had made it mandatory for every sale or purchase of property exceeding Rs 10 lakh to provide PAN so that the Income Tax can verify the income of the beneficiaries.
The Income Tax department’s drive against benami properties and its attempt to bring in transparency in property transactions in real estate sector seem to have taken a hit with the Chief Auditor pointing deals of more than Rs 15,000 crore where mandatory PAN (Permanent Account Number) of neither the buyers nor the sellers were available.
A recent CAG audit attempted to verify the assessment records/ ITRs of the sellers in the concerned assessment charges to see whether all the sellers of immovable properties have filed their ITRs. Audit could verify 923 such cases and found that in 90 cases (9.7 per cent) involving transaction value of Rs 391.40 crore, the sellers had not filed their ITRs.
CAG (Comptroller and Auditor General) audit of property transactions across India revealed there were 75,405 transactions in Maharashtra alone involving Rs 15,460 crore where none of the parties (buyers/sellers) had quoted PAN. The auditor’s finding for Maharashtra is a matter of concern given the fact that the state contributes highest in I-T collections.
In Delhi, Audit received information in respect of 13,650 transactions of sales/purchases of immovable property registered during FYs 2013-14 to 2016-17 from five Registrars of properties. In these transactions PAN of 6,591 sellers and 5,542 buyers were not available. Similarly, while verifying the transactions where PAN of either of the parties to a transaction (i.e. either buyer or seller) was available in Andhra Pradesh & Telangana, Delhi and Madhya Pradesh, we noticed that PAN in respect of the other parties in 102 cases4 was not available in the property registration documents. Source of investment in non-PAN transactions may remain out of purview of ITD. There may be a possibility that capital gain arising in non-PAN transactions may also have escaped taxation.
Recommendation by CAG: “The system in the I-T department to ensure compliance of filing of returns by the sellers of high value immovable properties was not effective,” CAG noted.
The auditor said that the “CBDT may consider taking up with the state governments to have an interface between IT system of ITD and that of Inspector General of Registrations (IGR) so that whenever sale of properties is registered with IGR office, the information is automatically populated into ITD systems as well “
The CBDT, in its reponse, has agreed to examine the recommendation and said that it has provisions in place to identify non-filers having transaction of high value property, but there is a need to strengthen its enforcement.
