NEW DELHI: The bitter fight over the poor response to the 2G auction is only the latest episode of a dispute that has played out in Parliament's Public Accounts Committee (PAC) and the Joint Parliamentary Committee (JPC) on telecom where Congress and the federal auditor have clashed fiercely.
The PAC draft report remains disputed while minister of state for information and broadcasting Manish Tewari — before he became a minister — had challenged CAG Vinod Rai in JPC meetings during which both sides tested each other's resilience and defences. Records of the JPC meetings show Tewari did his best to pin down Rai over the precise context of the term "presumptive" which the auditor has referred to while calculating a likely revenue loss in the allocation of 2G spectrum.
The Congress leader quizzed Rai over where the auditor derived his definition of the word presumptive in the Income Tax Act, arguing that the provision is intended to allow an assumption of tax liability in the event of books not having been audited.
This, Tewari argued, is not the same as presumptive loss. "To extrapolate that context of presumptive loss is not clear" he said and pointed out that the tax authorities had informed the JPC that they did not calculate this on a "presumptive basis." He wanted to know if CAG was using terminology that is not defined in the Income Tax Act.
In response, Rai said revenue audit reports always point to a revenue loss and a potential loss. He said he was also drawing the inferences used by CAG from the finance bill and its memorandum that talks of the special provision for computing profits and gains of business on a "presumptive" basis.
Rai said that Tewari referring to the term of consequence was surprising and the two went over the letter sent to the JPC by the central board of direct taxes. He referred to the CBDT saying "...in some cases where the mistake resulted in computing loss over and above the actual loss, the corresponding tax effect is merely a notional figure generally called by CAG as potential tax."
Rai contended that this was an incorrect claim on part of CBDT as the loss that CAG points out to is recovered by tax authorities. "It is actually recoverable, that is why it causes concern," he said. Tewari pressed Rai on whether they could agree on the word presumptive not being defined by the Income Tax Act. Tewari also referred to a Supreme Court ruling that presumption is only an inference and that there is need for a specific provision in the statute. Rai countered by saying that the statute did not mention the word potential either but this has not been challenged. "Am I to conclude that you are regularly in violation of your own statutes?" Tewari asked the CAG. "...what is a statute?...All we said is that a potential or a presumptive is till such time as is actually assessed to be proved to the contrary," Rai responded.
Government, 2G auditor fought it out in House panels too
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Government, 2G auditor fought it out in House panels too
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Government, 2G auditor fought it out in House panels too
