The Hindu Business Line : Periodic monitoring of I-T Act essential, says Union Law Secy

Kolkata, Aug. 16 The Income-Tax Act is an exception to the concept of “whether law should lead or follow”, as it was the only piece of legislation in the country which had a vast machinery to monitor its influence.

Speaking at the inaugural session of the two-day Silver Jubilee Conference 2007 of Direct Taxes Professionals Association (DTPA) , on the theme of ‘Accounting discipline and tax laws – A Challenge to professionals’, Mr T.K. Viswanathan, the Union Law Secretary, said amendments to tax laws in the annual Budget every year were necessary to prevent revenue leakage.

Describing the Income Tax Act as a privileged one among all the standing statutes in the country, he said different aspects of the tax provisions have to be continuously monitored to plug the loopholes which may lead to leakage.

Admitting that tax laws often faced the criticism of being highly complex, the Law Secretary said that the I-T Act was not for the common man, as it was “neither poetry nor prose”. The general rule here cannot be applied so generally, as the I-T Act had many provisions, though this aspect would be addressed in the proposed new Direct Tax Code. Mr Viswanathan said the Draft Code was still with the Finance Ministry.

When asked on the status of the Companies Act Amendment Bill, he said it was most likely to be placed before Parliament in the winter session. On the low ratio of judges to million population, he said while on the one hand the country had a massive population, it was also necessary to look at the qualitative aspect of our justice delivery system. He, however conceded that resource crunch was a problem.

Decline in pendency of appeals

According to Mr Vimal Gandhi, president of Income Tax Appellate Tribunal (ITAT), pendency of appeals have been brought down now to 83,000 (all over the country) from a high of 1.8-lakh appeals in 2003.

Pointing out that appeals pending in the four cities of Mumbai, Delhi, Chennai and Ahmedabad bordered around 4,000, he said that in all other cities it was less than 1,000. (In Kolkata, it is said to be around 1,300.) The ITAT has 63 benches in 27 locations in India.

Admitting to shortage of Members in the various benches, Mr Gandhi said that the Government has been apprised of the problem. There are 93 members in total against a sanction strength of 126.