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What is Tax Litigation?

Under the judicial system of India, Tax Litigation takes a very long time. At present, tax litigation in India takes two decades time to come to a conclusion and make a final decision. With the increasing aggression of the tax authorities, the cases that are appearing before the court are exceeding. There are many cases of tax litigation cases that are still pending at various forums. These cases are related to multinationals.

Tax Litigation mainly occurs in the areas given below:

In the matters of partnership and individual

In the case of non profit making business organisations or Charitable ones

Transactions of Cross border that occurs on permanent establishment and ascription

Matters related to withholding of tax

Restructuring of Corporate

Liability of tax in case of Royalty income

Issues related to Valuation under the Customs Act,1962

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Types of Tax Litigation Controversies

Tax Controversy

In the practice of settling tax conflicts with provincial, federal, local and international tax authorities, tax litigation and disputes abound. A tax dispute can include a business (either for-profit or non-profit), a trust, an estate, or an individual, and may arise from any other type of tax, including income tax, estate tax and gift tax, state sales and utility taxes, or property taxes. Generally, tax disputes are divided into civil and criminal matters.

Civil Tax Controversies

Tax-focused lawyers can assist the taxpayer in a public matter by providing expertise in applicable tax laws, dealing with financial agents, developing audit strategies, and following administrative or judicial complaints. While litigation is often a last resort for many taxpayers, an experienced attorney can provide competent representation in court proceedings. A tax attorney can play a key role in resolving a tax dispute or simply act as a tax advisor or his or her accountant. In addition, the attorney can assist the taxpayer in the planning process to avoid future disputes.
Public tax matters usually begin with inspections, inspections, and recruitment activities for the tax authorities. Alternatively, a dispute can be initiated by a taxpayer seeking a refund. At the state level, resolving a civil tax dispute may require negotiations with the IRS, a written complaint, and negotiations with the Office of Appeal, or, in the case of a U.S. Supreme Court, Regional Court, or State Claims Court. After a lawsuit is filed in a lower court, the taxpayer may have the right to appeal to the appellate courts. The same procedure is found in resolving civil tax disputes at state and local levels. An international tax attorney can assist the taxpayer in resolving disputes with the tax authorities in certain foreign territories or involving issues arising from international sales, including advanced decision-making applications for tax and security protection guarantees, applications by competent authorities to settle contractual issues, tariff negotiations and price reductions. use voluntary disclosure plans to prevent or reduce tax penalties.

Criminal Tax Controversies

Criminal tax cases involve taxpayers who allegedly evade taxes or deliberately violate tax laws. Taxpayers can assist those taxpayers by representing them during a criminal investigation by the IRS, the Department of Justice, or state tax authorities, and by criminal trials, courts and appeals. We have stood up and argued cases on behalf of our clients in matters related to state tax. These issues include rentals, sales and use tax, documentary stamp taxes on conveyances, corporate income tax, financing of real property and intangible personal property taxes.

Why choose our Tax Litigation?

We assist clients in making decisions by providing a detailed and detailed analysis of potential disputes and liabilities. Before starting the litigation process, we help clients evaluate the costs and benefits of the action to be taken.

We advise clients in the critical phase of tax management and to reach an agreement with tax authorities, using appropriate dispute resolution procedures.

We protect our clients in the presence of Tax Commissions, focusing primarily on excellence and consent. We explore other possible alternatives and determine the best way to prosecute, including its impact on subsequent financial periods, decisions already made, and any aspects of crime. Our in-depth knowledge of collection processes enables us to focus on managing the financial aspects of these disputes.

We also represent our clients before the Supreme Court and the Court of Justice.

Types of Tax Evasion that are Illegal or a Criminal act

The human mind is sharp enough to find loopholes in any system. It uses these loopholes to find their way to escape from some rules. Some examples of tax evasion and various other offences that comes under criminal tax are:

Smuggling of goods.
Hidden income that is found while search and seizure operations.
The removal or hiding, shifting or delivery of property to recovery of thwart tax
Clandestine removal of manufactured goods.
The failure to pay to the treasury taxes withheld
Wilful attempts to evade payment of any tax
Making false statements or accounts.
Anti-profiteering under GST Law
The collecting and retaining of service tax
Pre-court/pre-tribunal process.

Package Accounts Payable Services

Matching Invoices with Purchase Orders
Processing Purchase Orders
Processing Debit Memos
Processing Standard Pricing Information
Preparation and Processing of AR Aging Reports
Processing of Monthly AP Ledgers
Processing of Monthly Sales Tax

Tracking a Complicate, Emerging Risk

Against a fall of enlarged public and governmental discourse on avoidance of tax and rapidly rising and dynamic rules and requirements of compliance, corporations face greater review of their practices in connection with tax planning and a growing risk of involvement in tax controversy. Authorization of law counsel to strategy is imperative for relieving the influence of tax disputes.

Our clients benefit from our considerable experience in proactively managing and resolving audit and appeal disputes with the CRA, as well as our in-depth knowledge of the Income Tax Act and the CRA’s decision-making processes. Although we work with clients to avoid going to court wherever possible, in some of the most important tax litigation cases, litigators have successfully represented clients. We have served as counsel before the Supreme Court in landmark and dynamic tax cases of national significance involving broad groups of taxpayers. To our customers, our strategic focus and the scope and breadth of our expertise are invaluable. In our industry-leading civil litigation department and in our sophisticated litigation support team, our clients often benefit from the expertise and judgment of lawyers. We are at the leading edge of the market who give the best advice to our clients on the full range of tax issues. These tax issues involve the following things:

Transferring of prices.
Ignorance of tax as well as rules of the general anti-avoidance in the context of the federal and provincial.
Taxation of resources.
Accurate calculation of the profit.
Goods and services tax.
Deductibility of interest.
Credits related to Experimental Development as well as Scientific Research.
Interpretation of the treaty.
Reorganizations of the Corporates.
Control of the Corporates.
Benefits of shareholders as well as employees of any company that is operating its business.
The ability to reduce of settlement of payments and different types of expenditure.
Credits still remaining of the Foreign tax.
Definition of inventory stocks.
Residence for the purpose of tax.
A dimension related to the procedural tax matters and administrative.

Services that We offer

Helps to make strategies related to tax litigation.
Exploring alternate mechanisms to solve tax disputes.
Help in representing appeals before Commissioner of Income-tax, Panel of Dispute Resolution, Appellate Tribunal of Income Tax.
Supports while preparing advance ruling application and representing it before AAR,
Assists, prepares, represent, counsel petitions as well as appeals in front of High Courts and Supreme Court.

Assessments of Tax

A process in which the taxpayer shows his income to determine the amount of tax to be paid on that income is called Tax Assessment.

Levying of Penalties

Starting of proceedings of prosecution.

The occurrence of civil tax disputes related to the decisions of the Assessing Officers and Transfer Pricing Officers.

Following are the process for assessment of tax:

A draft assessment order is issued by the AO.
Whenever the taxpayer accepts the order of the draft
The AO passes the final assessment order within a month from the end of the month after the acceptance is received;
Within 30 days the taxpayer can appeal the decision to the Income Tax Commissioner
The CIT(A) can reduce, enhance or confirm the assessment.
Further appeal of the decision can be made to the Income Tax Appellate Tribunal within 60 days. This can be done within 120 days subsequently to the High Court. after receiving certificate from the High Court appeal can be made to the supreme court within 90 days. If no certificate has been received from the High Court Special Leave Petition can be moved to the supreme court
In case the taxpayer refuses the draft order
An objection can be filed with the Dispute Resolution Panel within 30 days.
Within 9 months the DRP will issue directions to the AO from the filing of objections. Final assessment will be passed by the AO to confirm with the DRP’s directions.
In case, the taxpayer is not satisfied with the decisio, it can be appealed to in front of the ITAT. If the taxpayer is still not satisfied with the decision given by ITAT, ihe has the option to appeal in front of the High Court and then at the door of Supreme Court.
Issue of draft assessment orders can be done in the assessments that are in relation to transfer pricing audits.

Goods and Service Tax Law

It is one of the parts of legislation. It regulates and controls civil tax litigation.

The main rules and regulations on the Goods & Service Tax Law are as follows:

Integrated Goods and Services Act 2017.
Central Goods and Services Act 2017
Union Territory Goods and Services Act 2017
The Constitutional Courts consist of twenty four High Courts and the Supreme Court of India. They have also set out several judicial precedents for resolution of disputes related to taxation in our country.
According to the figures of statistics showed up in the recent Economic Survey 2017-2018, the pending cases were as mentioned below:
- Cases held in front of the Supreme Court counts up to 9,300 cases.
- Cases held in front of the High Courts counts up to 52,622 cases amounting to nearly US$500 billion.
- Cased held in front of the Appellate Tribunals counts up to 175,676 cases amounting to nearly US$625 billion.

Procedure to Tax Litigation

The procedure of tax litigation takes a lot of time as well as tiresome, but it is a fact that it demands answers to many unanswered questions. The Tax Litigation Manager is the only person that can perform this function very well. It performs functions like capturing the various aspects of tax disputes. It also ensures that the figures are a reference and captured.

Highlights of the tax litigation tool:

The tool attains the whole gamut of the litigation process. Rating of Interest or Form 3CEB filing to an appeal for the sake of the High Court or the Supreme Court.
It functions to make standard of the several legal documents that are required to finalize the process of litigation.
To access billing-related information the tool helps to integrate other details related to finance.
For different users it comprises dashboards to analyse the status of long drawn out cases.
It can be combine to the CCH tool to get the date related Return of Income.
The tool contains intimation facility of email and task-tracking to make awareness among the users about their position in the process.

Our Service

Our practice has virtually tackled almost all type of cases and controversy of federal tax, before state, courts, and federal administrative agencies. We provide the best kind of service to the clients according to their case. The matter is studied in detail and then the experienced members take decisions for further steps. The members of our team are specialized in their work. Many of the clients still approach because of our quality of service for litigation of tax.

Our team will give you full support and guidance throughout the process.

The members of our tax controversy team are commercial litigators. They deal with cases for individuals, corporate, and trust.

The cases include:

Issues that all industries and financial or investment activities faces.
Our tax controversy representation has includes issues that have connection with tax accounting, R&D, valuation, insurance premium, reasonable compensation, inventory.

We have stood up and argued cases on behalf of our clients in matters related to state tax. These issues include rentals, sales and use tax, documentary stamp taxes on conveyances, corporate income tax, financing of real property and intangible personal property taxes.

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Frequently Asked Questions

Tax litigation under the judicial system of India is so much time taking that it consumes years to come to a final conclusion. The governing and quasi-judicial appellate authorities, that functions as fact-finding bodies under the Income Tax Act 1961, Customs Act 1962, Central Excise Act 1944 and lastly Good & Service Tax Law.

The given parts of legislation regulate and control Civil tax litigation:
• Income Tax Act 1961.
• Double taxation avoidance agreements.
• The Constitution of India 1950.
• Income Tax Rules 1962.
• Income Tax (Appellate Tribunal) Rules 1963.
• Authority for Advance Rulings (Procedure) Rules 1993.
• Income Tax Settlement Commission (Procedure) Rules 1997.
• Good & Service Tax Law.
• Income Tax Settlement Commission (Procedure) Rules 1997.
• Income Tax (Dispute Resolution Panel) Rules 2009.
• Black Money and Imposition of Tax Act 2015
• Benami Transactions (Prohibition) Amendment Act 2016
• Customs Act 1962.
• Code of Civil Procedure 1908.
• Central Excise Act 1944.
• Code of Criminal Procedure 1973.
• Income Tax Rules 1962.
• Finance Act 1994 (Service Tax).
• State-level value added tax, entry tax, sales tax, advertisement tax and luxury tax legislation.

Evasion of tax is considered to be a criminal offence. There is a thin line of difference between tax avoidance and tax evasion that could be judged from the facts of the case. Evasion of tax is illegal as per the Indian law and is prosecuted in an active manner.

The persons as well as the income tax authority that can administer the civil tax laws are as follows:
• Principal Commissioners of Income Tax.
• Central Board of Direct Taxes.
• Commissioners of Income Tax.
• Principal Chief Commissioners of Income Tax.
• Chief Commissioners of Income Tax.
• Additional / Deputy / Joint / Assistant Commissioners of Income Tax.
• Commissioners of Income Tax.

LegalRaasta was founded on the principle that sophisticated legal and taxation services should be simple, modern, and inexpensive. We can serve our clients more efficiently thanks to cutting-edge practise technology.

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