Arun Jaitley, Union Finance Minister said that primary object of constituting the panel will simplify the Income Tax Act. The Government has asked the Committee to study and recognize the provisions of the Income Tax Laws that are interpreted differently and highly debated. The high-level panel will work under a retired Judge of Delhi High Court which will suggest measures to simplify the taxation laws. Such report will be important to deal with the controversial provisions of the tax laws. The panel consists of 10 members as retired judge R V Easwar as its head. The Committee is ordered to submit the first report by 31st January. This is to include proposals which needs the legislative sanction in the 2016-2017 budget.
The Minister said that the Government was reviewing many past issues and now it is time to look into the Income Tax Act including the quality of drafting to avoid the confusions that subsists. Such review will help to clear some of the provisions that were ambiguous. The panel will in addition consider the provisions that restricts the easiness in doing business and also to recognize the provisions for its simplification according to the prevailing jurisprudence. Previously, the same Government had formed a panel with A P Shah, retired Judge of High Court of Delhi as its head. Such panel was constituted for looking into the retrospective operation of MAT or Minimum Alternate Tax that relates with profits generated by foreign portfolio investors and FIIs. Similarly yet another issue that needs immediate consideration by the Government is the Finance Bill, 2012 which contains the provision to levy tax form corporate for the profits generated as early as 1962.
The Government have to face arbitrary proceedings initiated by foreign investors including Vodafone regarding a tax dispute over Rs 20,000 crore for the retrospective operation of taxation laws. Another dispute is brought forward by British Oil Explorer Cairn Energy on tax liability for an amount of Rs 10,247 crore on the same issue. The panel should give suggestions on other possibilities and changes on the prevailing provisions and also on the provisions based on practicability. But such modifications shall not affect the tax base and tax collection. The other experts in the panel consists of government experts, persons form private sector etc.