MUMBAI, March 30: The All-India Federation of Tax Practitioners (AIFTP) has urged the finance ministry to constitute a committee of professionals for rewriting the Income-Tax Act of 1961.The committee will comprise of representatives from various voluntary organisations including AIFTP, Bombay Chartered Accountant Society and the Chamber of Income-Tax Consultants, according to AIFTP chairman (representation committee) K Shivaram.
"A two-year time-frame may be given to debate the suggestions made by the committee and thereafter, the committee will suggest whether the act may be simplified or it has to be replaced by a new legislation," he adds.
The committee should be empowered to draft the bill and present it for debate. And after a year of debate, the new act or amendments to the existing act may be introduced, says Shivaram.
The federation has also recommended that once the new Act is introduced, the amendments, if any, should be carried out prospectively and only once in five years. "Thesimplification will automatically reduce the litigation by 90 per cent", he adds. Quoting eminent tax expert, NA Palkhivala, who in an article in 1996, had stated that "the income-tax act is a national disgrace. There is no other instance in Indian jurisprudence of an act mutilated by more than 3,300 amendments in less than thirty year".
The various amendments have not only rendered the act more complex but the pendency of cases in direct-tax have increased as courts have been constantly grappling with the complexities of the law, feels Shivaram. The total number of cases pending before the Income-Tax Appellant Tribunal (ITAT) itself have increased to over three lakh.
Over the years, various committees and commissions were formed to revamp the act but in vain. Some of the important committees included taxation enquiry commission, 1954, Boothalingam's report (final report on rationalisation and simplification) 1967, Wanchoo committee report 1971, Raj committee report, 1972, Chokshi committee report, 1978,report of a study by National Institute of Public Finance and Policy by Shankar N Acharya in 1985.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
