The Central Board of Direct Taxes (CBDT) has decided to expand the terms of reference for the committee that has been formed to re-write the Direct Tax Code (DTC). The committee will now have to consider five more areas while drafting their recommendation, making the total terms of reference nine.
The newly added terms of reference includes recommendation to bring in faceless and anonymized verification, scrutiny and assessments, reduction of litigation and expeditious disposal of appeals from Commissioner of Income tax (Appeals) stage right upto Supreme Court, sharing of information between different verticals like Goods and Service Tax, Customs, CBDT teams and so on. Other two areas of consideration include simplification of procedure to reduce compliance burden on income tax assesses and system based cross verification of financial transactions.
“The expansion of terms of reference to areas like faceless assessments, exchange of information with other revenue departments, reduction of litigation, etc shows the tax department’s focus to expand the tax base and at the same time make a non adversarial tax regime for taxpayers. As the tax code gets future ready, these are the right things to focus on," said Amit Maheshwari, Partner, Ashok Maheshwary & Associates LLP states, a charted accountancy firm.
In September 2017, Prime Minister Narendra Modi had stated that there was a need to re-draft the direct tax Act. The government constituted a task force and asked it to submit a report in six months. However, the deadline has been extended several times and the upcoming deadline is 31 July. Apparently, the timeline for the panel to submit its recommendation taking into consideration new terms of reference remains unchanged.