Basements vary in construction. Mine has the insulation and waterproofing on the exterior side of the concrete. You would need to determine exactly what you are dealing with here, is there any signs of moisture on the paneling? As far as the smell its impossible to speculate, is it musty like mildew? Hundreds of things can cause odors in a house everything from animals to cooking odors and of course mildew/mold. I would start with finding the source of the odor and work to resolve it. Its possible that a previous owner had pets and they used the carpet, then it would need replaced along with the pad and potentially even the subfloor.

thanks and yes the smell is unusual. It very well could have been pets because the basement is very dry. We did have a leak in the laundry room that had been wet for a long time. It was plywood but it really stunk. We dried that out and now the renters are in. We will see if that corrects the problem.