Critical of the draft Direct Taxes Code (DTC), a section of senior revenue service officers has said it is an attempt to make the Central Board of Direct Taxes (CBDT) toothless.

The officers, mostly from the Income Tax Department in Mumbai, said DTC had recommended removing powers of CBDT to issue notifications or circulars or even bring in amendments.

The officers, who did not want to be named, alleged those who drafted the code had some ulterior motives in diluting the powers of the board.

CBDT has received several suggestions from stakeholders at different times and the board would not be able to implement them if powers to bring in amendments, notifications and circulars are taken away, the officers, who included Chief Commissioners and Commissioners, said.

They also regretted that the board, which was responsible for mopping direct tax revenue, had been kept away from the process of preparing the code.

The proposed code, which is to be implemented from April 1, 2011, claims that one of its purposes is to remove economic inefficiency, but it, in fact, introduces many contradictions, making it difficult to administer.

Citing some of the contradictions, they said Section 3 (1) (a) of the code included income of a resident accrued to a resident outside India.

But item 29 (a) (i) of the Sixth Schedule excludes income accruals to individuals outside India from the total income, thereby leaving out income of both residents and non-residents accrued outside India.

Similarly, Section 3 (1) (d) of the code includes income of a resident received by him outside India, whereas item 29 (a) (ii) of Sixth Schedule of the code excludes income of an individual received outside India.

These indicate that there is a serious conflict in provisions.