The Public Accounts Committee (PAC) on Monday recommended stern action against the assessing officers for irregular assessment of expenses towards gifts and freebies to medical professionals, which resulted in a Rs 55.10 crore loss in tax collection to the exchequer.
In its report, Committee headed by Adhir Ranjan Chowdhury on 'Assessment of Assessees in Pharmaceutical Sector' tabled in Parliament, said it has been informed that out of 36 cases, explanation of assessing officers has been called in 12 cases where audit objection has been accepted by the department.
"In view of the fact that a significant amount of tax is involved in these cases, the committee recommend that expeditious and stern action should be taken against the assessing officers concerned as mere calling for explanation would not result in avoidance of such cases in future," the report said.
The committee had earlier found that in 36 cases in seven states the expenditure towards gifts/freebies to medical professionals involving a tax effect to the extent of Rs 55.10 crore were allowed despite being made irregular by the Income Tax Act, Medical Council of India regulations, CBDT/ Judicial pronouncement etc, it added.
The committee had therefore recommended that these cases should be thoroughly inquired into so as to find out as to how and why such lapses occurred, to what extent they were bonafide mistakes and exemplary action taken against the officers concerned, the report said.
CBDT issued a circular in 2012 had disallowed such expenses.
Earlier in 2002, the Medical Council of India (MCI) had asked medical practitioners to prescribe generic drugs as far as possible. It also prohibited them to solicit or receive any commission or gifts for endorsing any medicine or treatment.
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