The Home Affairs Committee said it had been supplied incorrect data by the agency for six years, and "repeatedly misled" by former head Lin Homer.
Ms Homer, now the head of Revenue and Customs, said the accusation was unfair and untrue.
The report comes as the prime minister announces steps to restrict the rights of some immigrants to social housing.
In its latest report into the immigration agency, the committee said that for six years the UKBA had repeatedly supplied incorrect information about the size of the asylum backlog and measures supposedly being taken to trace others with whom officials had lost contact.
The MPs said the failure to trace these other migrants, whose cases were placed in a closed "controlled archive", led officials to conclude that they were not in the UK when in fact tens of thousands of them could be.
The report said that the total backlog of unresolved or disputed immigration cases in the UK was 312,726 at the end of September last year - but it was not possible to be sure if that figure was accurate. Officials say the committee's figures include cases that have either been closed or should not be considered as part of a backlog.
Continue reading the main story“Start QuoteThe suggestion that I deliberately misled the Committee and refused to apologise are both untrue and unfair”End QuoteLin Homer "Lin Homer, who was in charge of the Agency for much of the period in question, has repeatedly misled the Committee over the size of the asylum backlog and still refuses to take responsibility for her failings," said the committee."It is shocking that after five years under Lin Homer's leadership an organisation that was described at the beginning of the period as being 'not fit for purpose' should have improved its performance so little.
MPs 'astounded'"Given this background, we are astounded that Ms Homer has been promoted to become Chief Executive and Permanent Secretary at Her Majesty's Revenue and Customs and can therefore have little confidence in her ability to lead HMRC at what is a challenging time for that organisation."
Ms Homer has already written to the committee to refute the allegations which she says relate to events after she left the agency 18 months ago.
"The suggestion that I deliberately misled the Committee and refused to apologise are both untrue and unfair," she said in the letter. "It is therefore wholly inaccurate and unfair to seek to ascribe responsibility to me for matters of concern that occurred long after I left the Agency."
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