Tax Litigation

Tax Litigation

Enterslice has a team of experts to handle tax litigation matters. Connect with us to talk to our experts and receive professional assistance in tax litigation.

Package inclusions:
  • Guidance in strategizing tax litigation
  • Assistance in preparing, representing appeals and petitions before High Courts and Supreme Court.
  • Drafting reply to notices preparing responses to the queries raised during the RFAC
  • Advisory, support and presentation before the appellate forums.
Tax Litigation

Overview of Tax Litigation

Tax can be defined as a mandatory fee or financial charge levied by the government on an individual or entity. The Indian Tax Laws are governed under the Income Tax Act 1961.

Tax Litigation refers to the initiation of legal proceedings regarding disputes arising due to the non-compliance of tax laws. Tax litigation can be a time-consuming process due to the complexities of the taxation procedure and the delays in the appellate process.  There has been a rise in the number of tax litigation cases due to the increasing aggression amongst the tax authorities.

Issues that Lead to Tax Litigation 

The major issues that lead to tax litigation are given below

  • Individual and Partnership matters
  • Charitable and non-profit making institutions
  • Cross-border transactions on permanent establishment and ascription
  • Transfer Pricing Matters such as marketing intangibles, management expenses across the border, compensation for captive service, royalty payments, transfer pricing methods and comparable.
  • Matters concerning the withholding of taxes
  • Corporate Restructuring
  • Tax Liability related to Royalty Income
  • Valuation issues under the Customs Act,1962

Categories of Tax Litigation

The various categories of tax litigation are 

  • Civil Tax litigation
  • Criminal Tax Litigation
  • Civil Tax Litigation are regulated and handled by following legislation:
  • Income Tax Act 1961 (Chapters XIX-A, XIX-B and XX).
  • Income Tax Rules 1962.
  • The Constitution of India 1950.
  • Double taxation avoidance agreements.
  • Income Tax (Dispute Resolution Panel) Rules 2009.
  • Income Tax (Appellate Tribunal) Rules 1963.
  • Authority for Advance Rulings (Procedure) Rules 1993.
  • Income Tax Settlement Commission (Procedure) Rules 1997.
  • Imposition of Tax Act 2015 
  • Black Money (Undisclosed Foreign Income and Assets) and 
  •  Code of Civil Procedure 1908.
  • Central Excise Act 1944.
  • Customs Act 1962.
  • Finance Act 1994 (Service Tax).
  • State-level value added tax, sales tax, entry tax, luxury tax and advertisement tax legislation.
  • Goods and Services Tax Act, 2016 (likely to be implemented from 1 July 2017).

It is important to conduct a judicial cost-benefit analysis to decide whether it is worthwhile to initiate tax litigation or if the issue is more viable to compromise.

Procedure of Tax Litigation

The detailed procedure of tax litigation is explained below –

Return Filing by the Taxpayer          

The taxpayer must complete the Return Filing Process before the due date to avoid any penalties.

 Passing of Assessment Order 

Once the taxpayer has filed the return, it will be assessed and scrutinised by the assessment officer, followed by passing the assessment order.

Filing of Appeal by the Taxpayer 

If the taxpayer is not satisfied with the assessment order passed by the assessment officer, the taxpayer can file an appeal according to the hierarchy mentioned below –

  1. Commissioner of Income Tax (CIT)
  2. Income Tax Appellate Tribunal
  3. High court 
  4. Supreme Court 

  Time Limit of Filing Appeals and Appeal Hierarchy

  • Appeal  before the Commissioner of Income  Tax (Appeal) can be filed within a period of 30 days
  • Appeal to Income Tax Appellate Tribunal within a period of 60 days.
  • Appeal to High Court within 60 days.
  • Appeal before Supreme Court within 90 days.

Key Services Offered by Enterslice

  • Helping in strategizing tax litigation
  • Exploring alternative tax dispute resolution mechanisms
  • Assistance in representation before Commissioner of Income tax (Appeals), Dispute Resolution Panel, Income Tax Appellate Tribunal
  • Assistance in preparation of advance ruling application and representation before AAR
  • Assisting, counselling, preparing, and representing appeals and petitions before High Courts and Supreme Court

Frequently Asked Questions

The hierarchy of Tax litigation in India is- Assessment will be done by an Income - Tax officer; if the taxpayer is not satisfied by the assessment order, an appeal can be filed before the Commissioner of Income – Tax, any order passed by CIT (A) will be challenged before Income – Tax Appellate Tribunal; however an order of ITAT will only be challenged before High Court and Supreme Court on the substantial question of law whereas if an appeal is to be filed before Supreme Court, a certificate has to issue by the high court.

  • Appeal before Commissioner of Income – Tax (Appeal) within 30 days from the date of the order of the AO.
  • Appeal before Income – Tax Appellate Tribunal within a period of 60 days from the date of the order of the CIT (A)
  • Appeal before the High Court can be filed within 60 days from the date of the order of the ITAT.
  • Appeal before the Supreme Court within 90 days from the date of the order of the High Court.

A Chartered Accountant or practising Advocate can represent the Taxpayers before ITAT. However, the practising Advocate is empowered to represent his client even before Supreme Court and High Court.

Use of Artificial intelligence for scrutiny of cases Abolition of territorial Jurisdiction, automated random allocation of cases, document identification number, No human interface and many more features are there.

The Appeal can be filed before the National Faceless Assessment Centre.

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