Asking the Government not to abandon the Direct Taxes Code (DTC), a Parliamentary panel on Friday said this new law needs to be enacted to replace the existing Income Tax Act, which it said was ‘very cumbersome’ and prone to avoidable litigation.
“The Govt should go ahead with the DTC with its good provisions and implement the same within a stipulated deadline along the lines of the GST regime,” said the Standing Committee on Finance said in its report, which was tabled in Parliament on Friday.
Headed by M Veerappa Moily, the committee said it is not convinced with the Govt's logic that there was ‘no great merit in going ahead with the DTC as most of its provisions were incorporated in the present IT Act. The report said that the existing IT Act “is considered a very cumbersome statute, fraught with complexities and several ambiguities prone to capricious interpretation and avoidable litigation.”
The DTC, which sought to replace the IT Act of 1961, was drafted by the previous UPA Govt. The panel also underlined the need for preparing a time-bound plan to realise the tax arrears which are not disputed and can be collected. It also suggested that officials should be held accountable for failure to collect undisputed tax arrears. The quantum of undisputed or uncollected arrears in direct taxes in 2012-13 was Rs1,06,610 crore, which rose to Rs 1,32,055 crore in 2013-14.