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

Tax Litigation

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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.

  • 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.

  • 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

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.

  • 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.

  • 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.

  • 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.
  • 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.

  • 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.

What are the most occurring issues subject to litigation of tax in your sovereignity?
What are the legislative framework and principal parts of legislation that govern both civil and criminal tax litigation?
What are the main factors that constitute evasion of tax and other important offences of criminal tax in your administration?
What is the process for assessments of tax, re-assessments and administrative determinations in civil law?

Tax Litigation

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