CBDT Sets Up Committee Of Legal Luminaries To Simplify Income-Tax Act

The CBDT has issued a press release dated 27.10.2015 stating that a Committee comprising of eminent legal luminaries has been set up to simplify the provisions of the Income-tax Act. The Committee comprises of luminaries such as Justice R.V. Easwar, (Retd.), former Judge, Delhi High Court and former President, ITAT and other eminent advocates and lawyers. The terms of reference to the Committee have been clearly spelt out.


Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

PRESS RELEASE

New Delhi, 27th October, 2015

Subject: SETTING UP OF COMMITTEE WITH A VIEW TO SIMPLIFY THE PROVISIONS OF THE INCOME TAX ACT, 1961

With a view to simplify the provisions of the Income Tax Act, 1961, a Committee has been constituted with the following composition:

(i) Justice R.V. Easwar, (Retd.), former Judge,
Delhi High Court and former President, ITAT – Chairman
(ii) Shri V.K. Bhasin, former Law Secretary – Member
(iii) Shri Vinod Jain, Chartered Accountant – Member
(iv) Shri Rajiv Memani, Consultant – Member
(v) Shri Ravi Gupta, Sr. Advocate – Member
(vi) Shri Mukesh Patel, Chartered Accountant – Member
(vii) Shri Ajay Bahl, Consultant – Member
(viii) Shri Pradip P. Shah, Investment Adviser – Member
(ix) Shri Arvind Modi, IRS (IT:81009) – Member
(x) Dr. Vinay Kumar Singh, IRS (IT:95006) – Member

2. The Terms of Reference (ToR) of the Committee shall be as follows:

i) To study and identify the provisions/phrases in the Act which are leading to litigation due to different interpretations;

ii) To study and identify the provisions which are impacting the ease of doing business;

iii) To study and identify the areas and provisions of the Act for simplification in the light of the existing jurisprudence;

iv) To suggest alternatives and modifications to the existing provisions and areas so identified to bring about predictability and certainty in tax laws without substantial impact on the tax base and revenue collection; and

3. The Committee shall set its own procedures for regulating its work. The Committee can also work in Sub-Groups and the draft prepared by the Sub-Groups can then be approved by the whole Committee. The Committee will put its draft recommendations in the public domain. After stakeholder consultations, the Committee will formalise its recommendations. The Committee can give its recommendations in batches. The first batch containing as many recommendations as possible shall be submitted by 31st January, 2016.

4. The Term of the Committee shall be for a period of one year from the date of its constitution.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT


16 comments on “CBDT Sets Up Committee Of Legal Luminaries To Simplify Income-Tax Act
  1. Varaprasad Daitha says:

    Sri HARI OM MARATHAji, I stand elevated in understanding the issues as explained by you. Your analysis as Judicial member of ITAT is highly appreciable. It is true that the officers in the department never read the explanatory note released after the budget approval. Had they read carefully there could be no other inferences in many cases. It is only the immature officers’ inferences are alone the causes for so many appeals. I had worked as Jr. AR on behalf of Department for a short period of 6 months during which I had to deal with about 555 appeals and 90% of them were only due to incorrect inferences of the provisions of the officers.

  2. Hari Om Maratha says:

    From: hari om
    Date: Monday, November 2, 2015
    Subject: In re proposed Terms of Reference to the Committee formed to simplify the provisions of the Income Tax Act 1961
    To: hari om:

    To
    Sh Arun Jaitley Hon’ble Finance Minister
    2,Krishana Menon Marg
    New Delhi
    Emailed through his PS Sh Simanchala Dash with id smn.dash@nic.in

    2–Chairman CBDT chairmancbdt@nic.in
    North Block New Delhi
    Sir,

    Glad that you have set up a committee to look into the Income Tax Act of 1961, with a view to simplify it. This Act is tinkered every year .It was a long pending demand .This Act is generally infamous in the circle of stakeholders as it is branded as a complex and labyrinth one .I personally congratulate you for this initiative.

    Not only I I am a stakeholder but also have long conversance with its provisions as these were the subject matter of consideration by me in the capacity of a Judicial Member of the Income Tax Appellate Tribunal of India(ITA), That is why I feel interested in this topic and as a matter of fact I want to share my experience considering myself duty bound to do so. It seems that the sole aim of setting up of this Committee is spelt out in the RoT but in my humble view the impelling force for the same is the general perception about the Act that it is not only complicated but is also labyrinth. That the Act is over-burdoned with numerous explanations , illustrations and provisos which lead to unnecessary litigations and also creates difficulties for the businessman.
    With the changing economic scenario the deptt is left with no option but to make elaborate changes in this Act by way of amendments. With illustrations and explanations the task of assesses is made easier and the litigation is curtatailed to some extent.

    But the task of drafting is handed over to a committee by the authority of the day based on another perception. When merit is sacrificed for any consideration such things are bound to happen . Be that as it may , even the present ToR being verbose is open to divergent meanings . Alas! this important task is done in a perfunctory manner and not in the professional one .

    As per the press release dated 27 th Oct. 2015 , the Terms of Reference (ToR) given to this committee are:-

    i) to study and identify the provisions and the phrases used in the Income- tax Act 1961 which leads to litigation on account of different interpretation . Here I would like to humbly state that interpretation by whom is being referred to -by the revenue department , by the tax-payer or by the courts/tribunal .This ToR itself is ambiguous . In case it refers to the deptt there can be in – house correction as it is not supposed to read a provision differently . Of course the taxpayer can read a provision differently to his benefit and that too with impunity. In a country where rule of law prevails , no one can stop him from doing so . Now comes the Courts or Tribunal – they are bound to apply the provisions of law objectively and not to supply subjective meaning to them. A court in India can only apply the law and can not create a law unlike in common law. .The term ” interpretation ” in India is equivalent and is synonymous with the term ‘applying its plain ,simple and ordinary meaning ” to a provision of the Act . Amending the Act and also preserving its original meaning is not possible.To fix this tangle the attitudinal change of the Judges, appointed on merits,is only the answer . Otherwise it will be a futile exercise bearing no fruits and result in wastage of dear money of the taxpayers.

    ii) The second ToR is regarding study and identifying the provisions of the Act which impact smooth running of of business(sic . impacting the ease of doing business)

    Here I would say that all the provisions of the Act impact the smooth running of business from the perspective of the taxpayer .

    iii)This reference is hard to understand .The phrase “in the light of the existing jurisprudence” is ambiguous .A jurisprudence is a science of laws . This ToR seems to refer to precedents in my opinion.

    iv) The fourth ToR is full of contradictions. There can not be any ” alternative ” to an existing provision Any alternative will change that law altogether .An alternative is different from the original. The job of enactment is otherwise assigned to the Parliament and no other body. .Further these alternatives, obviously will be in the favour of the assesse ,so they are bound to effect tax-base and the revenue collection .

    Further , in Law predictability of judgement is alien . Yes , threre must be certainty of laws to command respect

    in view of the above epilogue it is my considered request that the terms of reference may be re framed so that general public can easily construe their meaning and can give valuable suggestions.

    HARI OM MARATHA
    JUDICIAL MEMBER OF IT AT (RETIRED)
    B-4/213 SAFDARJUNG ENCLAVE
    NEW-DELHI

  3. Hari Agarwal says:

    pl simplify the ambiguity in Income tax Act and pl do not attempt to rewrite a new law like DTC.

  4. Nanu Behram Daruvala says:

    Please simplify, section 14A read with rule 8-D; study legal decisions of last five years and jot down repetitive issues and address them

  5. K K Mahajan says:

    Why Mr. Arvind Modi? fiasco of restructuring of 2001 and subsequent effect has been forgotten?

  6. gopal nathani says:

    remove proviso’s and explanations alltogether. remove overriding clauses from the Act alltogether. remove mat. remove inclusive definition of income from definition section 2 and redefine taxable incomes definition and exempted incomes under respective head of income. time to bring agriculture and charity to income tax in a rational manner. remove all exemptions. and leave aside mind sets and awards/trophies and motivation to the bureaucracy. bring in electronic business culture and zero interface. and also lets not shirk from changes/amendment that are utmost if they impact the budget of the government/average tax payer, either way. nothing can be static in this world.

  7. Deepak Soni says:

    Now there is one more committee and the committee shall make several recommendations after wasting several hours, scarce papers and money and the recommendations shall bring more and more difficulties for the tax payers.The country has seen many committees and several reports and at every stage there have been problems. Give me only two days and a good computer operator and I assure I can bring a new Income tax Act which shall be free of all the hassles , very simple and friendly for the honest tax payers and very very tough for the tax evaders.

  8. CA P.C.Maloo Raipur says:

    We should well come the step taken by the government and try to suggest the measures to achieve the object of the committee. Area which causes hardship to the business may be focused to remove it. One area is left to be included in the object of the committee i.e. how the irresponsible act on the part of the tax administrator can be checked. There are many instances where the purpose of the tax friendly regime is defeated by the will full irresponsible act of the tax administrators. While taking decision the tax administrator wants to save their skin at the cost of harassment to the tax payers. Some of the area is as under:
    a) Filing of appeal before ITAT/HC without considering the merits but merely on the ground of tax amount involved.
    b) Framing search assessment solely on the basis of appraisal report prepared by the Investigation wing leading to fruitless litigation and harassment to the assessees. In first appeal 95% of the additions are deleted. No action on erring officers.
    c) Central circle which deals with the search assessment cases, are under the dictate and control of DG/DI who always justify the unilateral findings of the Investigation wing. Search cases be monitored by the CCIT/CIT instead of DG/DI.
    d) Release of seized assets have no time limit. No officers are interested to even respond to it for number of years. Who shall punish such officers.
    e) In case of refunds delayed due to department, higher rate of interest be granted and the excess interest be recovered from the irresponsible authorities.
    f) Provisions for prosecution should be attracted only in cases involving substantial amount and that too for contumacious conduct.
    These are only few areas, there are many areas for which our fellow brothers should respond.

  9. I.S.Verma says:

    I agree, there is no necessity to change the Law, necessity is to change the mind-set of the Authorities.

  10. gopal nathani says:

    the underlying objects are well-reasoned. cheers therefore.

    but i wonder that in choosing ten members the CBDT could not find even one good women member for this cause. please do include some young minds too including some women to get path-breaking ideas in this ever changing world. income tax pinches eveyone household budget so include some common man into your committee. i find people struggling to file their taxes every year. they fail to know their exact liability and often miss on to claim what they have paid in excess until they lend up with some professional help. we need to think a loud and stop looking at past laws and legal jurisprudence/old cases/interpretations and move into future in a smarter electronic way. bring in the object to set a sense of trust among tax collector and tax payer. rgds

    • Rajiv Tyagi says:

      Let’s not make it a men vs. women debate. I do not think a lady member’s nomination to the committee would add any more value. What is needed is that the Act should be simplified. The Finance Act each year should just deal with the appropriations and none of the provisions should not be altered for a period of 5 years at least. No amendments should be made just to nullify the effect of the judgements that benefit the assessees. The Tax Department should be motivated to be assessee friendly. The assessees-friendly officials should be nominated by the Tax payers themselves in each State each year and they may be awarded with a trophy to initiate competitiveness in being assessees friendly.

  11. I.S.Verma says:

    Another effort like Direct Tax Code to waste Taxpayers Money- Carry on- Good wishes to Conquer the ‘Everest Peak’.

    • bobjee Kurien says:

      When ones hand is dirty they cannot clean up a system My question is why set up committees when the officials are vested with sufficient powers to execute their duties Transferring ones responsibility to a group of people . Great . If you can implement implement or else quit gracefully or accept your impotency

  12. Nem Singh says:

    The chairman of the committee is most regardable person the well known to the difficulties and ambiguities of Tax Law in present scenario. I think they have considered the all the issues on both the sides ie Department as well as Assessee/taxpayers

  13. Varaprasad Daitha says:

    It is a welcome action. I hope the Committee might invite some suggestions from the public directly or indirectly connected with the Direct Taxes.

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