Dispute Resolution Panel and PTA

Overview of Property Tax Appeals and Dispute Resolution Panel

India's tax function has significantly emphasised dispute resolution in the past. So, the Dispute Resolution Panel (DRP), a new alternative made available by the Finance Bill 2009, which will aid in transfer pricing litigation. The DRP is an Alternative Dispute Resolution process to resolve disputes about Transfer Pricing in International Transactions. This Panel was established to expedite the fair and just resolution of issues.

International companies expanding into India's market suggests that there are more significant opportunities for tax collection there. However, as the firms expand, so should the Revenue Department's capacity for settling disputes. The Dispute Resolution Panel (DRP) is a new alternative mode available by the Finance Bill 2009 to aid in transfer pricing litigation. The DRP is an Alternative Dispute Resolution process to resolve disputes about transfer pricing in International transactions. This Panel was established to expedite the fair and just resolution of issues.

Constitution of the Dispute Resolution Panel

The Central Board of Direct Taxes (CBDT) established the Dispute Resolution Panel, a collegium comprising three Commissioners of Income-tax.

When can resolution be sought under DRP?

If the Assessing Officer wants to pass an unfavourable judgement against the assessee, he must send the assessee a draft of his assessment order. A 30-day notice is then given to the qualifying assessee, during which time he must decide whether to accept or object to the order.

If the assessee disagrees with the order, he may submit a complaint with the DRP or the Assessing Officer. Let's say the DRP receives the objections. In that situation, they will examine the facts, give the assessee a chance to be heard, and then instruct the Assessing Officer in light of their evaluation. The Assessing Officer must follow any instructions issued by the DRP.

Matters to be considered by DRP

The DRP may make any inquiries about the assessment and instruct any income-tax body to inquire and report its findings. The following must be taken into account by the Panel before making a decision or giving instructions:

• Draft order
• complaints made by the assessee
• The assessee's testimony provided evidence
• Report from any authority (such as the officer responsible for evaluating offers, transfer pricing, or valuation)
• necessary papers about the proposed order
• Evidence was gathered
• The outcome of the research.
• The duration for giving instructions and granting orders

Within nine months of the end of the month, the assessee gets the draft order, and the DRP must give the Assessing Officer instructions. When the Assessing Officer gets such instructions, he has one month from the end of the month in which he receives them to complete his assessment following such instructions.

The assessee will not be given a chance to speak at this period. The assessing officer must finish his assessment within one month of the end of the month when such 30 days expire. After that, the assessee accepts the draft order if the assessee does not object to the draft order within the prescribed period of 30 days and if he accepts the draft order.

Property tax in dispute resolution

Resolution procedures for property tax disputes can differ based on the jurisdiction and laws in force. Here are a few typical methods for settling property tax disagreements:

• Informal negotiations:

  Property owners may inform the local assessor's office or tax authority to settle the conflict. This can entail giving further details, supplying supporting data, or clarifying any ambiguities or inconsistencies in the evaluation.
• Several jurisdictions offer a method for administrative review or reconsidering property tax disputes. Property owners can ask the appropriate tax body for a review, and they will examine the assessment or decision. This procedure allows a formal review of the matter without needing a court or legal action.

• Mediation:

  A neutral third party facilitates the property owner and the taxing authority's conversations and negotiations in mediation. A less formal and adversarial method of dispute resolution is mediation. The mediator supports the parties as they investigate options and reach a mutually beneficial resolution.

• Appeal to a tribunal or administrative board:

  In many jurisdictions, tribunals or administrative boards are set up mainly to handle property tax appeals. These panels or tribunals offer a neutral, unbiased evaluation of the case. Property owners can argue for a different assessment or tax due by making their claims and supporting them with evidence. The board's or tribunal's judgement is usually final, subject to any additional appeal rights.

• Judicial appeal:

  Property owners can bring a case in a court of law if the dispute cannot be addressed administratively. This usually entails bringing the matter before a judge or legal authority, who will consider the available evidence, hear the arguments, and reach a conclusion.

Depending on the jurisdiction and the applicable legislation, the specific dispute resolution procedures and solutions may differ significantly. Property owners should research local laws, get legal counsel, or contact the appropriate tax body to learn about the options for settling property tax disputes in their region.

Property tax appeal

Submit a property tax appeal if you think your property has been overvalued or your property taxes are excessive. Depending on the jurisdiction and local legislation, the procedure for submitting a property tax appeal may vary, but the following standard procedures might serve as a rough outline:

• Examine tax and assessment records:

  Get a copy of your property's tax and assessment records. Scrutinise them to comprehend how the valuation of your property was established and the amount of tax you are charged.

• The appeals deadline:

  Verify the jurisdiction and the deadline. You must submit your paperwork before the deadline to preserve your right to file an appeal for that tax year.

• Assemble evidence:

  Gather information to support your claim that the property is worth less. This can include current property appraisals, nearby comparable property sales, images of property damage or other problems, or any other proof that your home is overpriced.

• Contact the assessor's office:

  Contact the assessor's office or the relevant municipal tax authority to learn about the appeals process and receive the appropriate paperwork. They can give you detailed guidelines and conditions for submitting an appeal.

• Prepare to appeal:

  Fill out the necessary forms and offer supporting evidence. Explain why you believe your property assessment or tax calculation is erroneous and clearly state your appeal's justifications.

• Submit the appeal to the relevant authority:

  Keep a copy of every necessary paper for your records, and get confirmation or a receipt as proof that it was delivered.

• Attend a hearing (if necessary):

  In some circumstances, you can be asked to appear in person before an appeals board or a hearing officer. To support your appeal, gather any new information or arguments, and be prepared to present them during the hearing properly.

After hearing the appeal, a decision can be given on your appeal following the hearing or review procedure. If your appeal is granted, your property assessment can be changed, resulting in lower property taxes. Depending on your local laws, you can appeal the decision again if your appeal is rejected.

It is worth noting that local laws may have very different standards and specialised processes for property tax appeals. To ensure you follow the proper procedure and increase your chances of success in your location, you should speak with a tax expert or seek legal counsel.

Regulating bodies under Property tax

In India, where property tax is collected and administered locally, local municipal or panchayat legislation often handles property tax appeals. Depending on the state and municipality where the property is located, different laws may apply to property tax appeals. Here are a few illustrations:

• Local Government Corporation Act:

  The legal foundation for real estate tax assessments and appeals is provided by Municipal Corporation Acts, which numerous Indian states have passed. The steps, deadlines, and justifications for submitting appeals against real estate tax assessments are outlined in these acts. For instance, the Mumbai Municipal Corporation Act in Maharashtra regulates Mumbai property tax appeals.

• Municipal Property Tax Bylaws:

  Each municipality or municipal organisation may have its own bylaws governing property taxes. These regulations include more information about how assessments are made, how property taxes are calculated, and how to file appeals. For correct information, it is crucial to refer to the particular property tax regulations of the relevant municipality.

• State-specific rules:

  Property tax appeals may be governed by state-specific laws or regulations in several Indian states. For instance, the Karnataka Municipal Corporations Act establishes the legal basis for state property tax assessments and appeals.

Procedure to file a property tax appeal

The property tax appeal process in India usually involves the following steps:

• Review the property assessment:

  Property owners should go over the evaluation of their property, which takes into account details, the property's location, its type, and its features. To ensure accuracy, they should also double-check the tax calculation.

• Reasons for appealing:

  Determine the proper grounds for the appeal, including any factual or legal flaws in the assessment, an improper property valuation, inaccurate property information, an incorrect tax rate application, etc.

• Appeal:

  Submit a protest to the relevant body, usually the municipal corporation or local agency collecting property taxes. The appeal should be supported by evidence disputing the present assessment, such as property records, property valuation reports, or other relevant Paper works.

• Hearing on the appeal:

  If the appeal is granted, a hearing may be held so that the property owner may argue their position and offer more proof to back up their claim. The evaluating authority may engage in discussions, make presentations, or conduct examinations during the hearing.

• Appeal:

  Submit a objection to the relevant body, usually the municipal corporation or local agency collecting property taxes. The appeal should be supported by evidence disputing the present assessment, such as property records, property valuation reports, or other relevant Paper works.

• Hearing on the appeal:

  If the appeal is granted, a hearing may be held so that the property owner may argue their position and offer more proof to back up their claim. The evaluating authority may engage in discussions, make presentations, or conduct examinations during the hearing.

Service offered by Enterslice

• To find potential mistakes, contradictions, or overvaluations, they may examine the property tax assessment.
• They can assist in gathering and organising pertinent material and evidence to support the appeal, such as property value reports, comparable sales information, and pertinent financial data.
• They might help prepare and submit the papers and other materials needed for the appeals process.
• They may represent property owners during negotiations with taxing authorities or assessment districts to reach an agreement or conclusion.

• Support for Litigation:

  When a settlement cannot be reached through negotiation, they may offer assistance and direction throughout the litigation process, working with legal counsel if necessary.

• Compliance and consulting:

  To ensure property owners understand their tax duties and maximise their future tax positions, they may offer continuing compliance support and consulting services.