Direct tax committee calls for major changes to reassessment rules

The panel had also incorporated some suggestions of the previous Arbind Modi committee

The government-constituted task force for re-writing the direct tax legislation has suggested major changes in provisions for reopening and reassessment, in a bid to reduce litigation, said a source privy to the development.

The panel on the Direct Tax Code (DTC) proposed amendments in Section 147 and Section 148 of the Income-Tax (I-T) Act, empowering the tax officer to reopen assessment cases based on pre-defined criteria. The I-T officer can go back up to six years to scrutinise the books of accounts of the assessees. 

Currently, these provisions are prone to the interpretation. Forty per cent of litigation happens because