Tax Advocacy / Litigation

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What is Tax Litigation/Advocacy?

Tax Litigation under the Indian judicial system is time consuming. The adjudicating and quasi-judicial appellate authorities act as a fact finding body under the Income Tax Act, 1961 and the constitutional authority .i.e. High Courts and Supreme Court of India. Currently tax litigation in India takes more than two decades to reach its decisiveness. As per report of CAG (Comptroller and Auditor General of India) there are Rs.2.2 lakh crore cases are locked up in appeal out of which in most of the cases the government is the appellant. As the tax authorities are getting more aggressive the numbers of cases appealing in the court are increasing. Also most of the tax litigation cases pending at various forums are of multinationals.

Tax Litigation often arises in the following areas:

  1. Individual and Partnership matters
  2. Charitable and non-profit making institutions
  3. Cross border transactions on permanent establishment and ascription
  4. Transfer Pricing Matters such as marketing intangibles, management expenses cross border
  5. Compensation for captive service
  6. Royalty payments
  7. Transfer pricing methods and comparable
  8. Matters concerning withholding of taxes Corporate Restructuring Tax Liability related to Royalty Income Valuation issues under the Customs Act,1962

Categories of Tax Litigation: There are two kind of tax litigation, which is described below:-

  1. Criminal Tax Litigation: Criminal Tax Litigation are regulated and handled by the following legislation:
    1. Income Tax Act 1961 (Chapter XXII).
    2. Income Tax Rules 1962
    3. Code of Criminal Procedure 1973
    4. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015
    5. Benami Transactions (Prohibition) Amendment Act, 2016
    6. Good & Service Tax Law
    7. Central Excise Act 1944
    8. Customs Act 1962
    9. Finance Act 1994 (Service Tax)
    10. State-level value added tax, sales tax, entry tax, luxury tax and advertisement tax legislation.
  1. Civil Tax litigation: Civil Tax Litigation are regulated and handled by following legislations:
    1. Income Tax Act 1961 (Chapters XIX-A, XIX-B and XX).
    2. Income Tax Rules 1962.
    3. The Constitution of India 1950
    4. Double taxation avoidance agreements. Income Tax (Dispute Resolution Panel) Rules 2009
    5. Income Tax (Appellate Tribunal) Rules 1963
    6. Authority for Advance Rulings (Procedure) Rules 1993
    7. Income Tax Settlement Commission (Procedure) Rules 1997
    8. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 (to be enforced from 1 April 2016 Code of Civil Procedure 1908.
    9. Central Excise Act 1944
    10. Customs Act 1962
    11. Finance Act 1994 (Service Tax)
    12. State-level value added tax, sales tax, entry tax, and luxury tax and advertisement tax legislation
    13. Goods and Services Tax Act, 2016 (likely to be implemented from 1 July 2017)

Given the lawful maze that taxpayers often face you judicial cost benefit analysis is required to be done which can help to arrive at a decision of whether it is worthwhile to litigate or the issue is more viable to compromise.

Our key point of services for Tax Litigation:

  1. Helping in strategizing tax litigation
  2. Exploring alternative tax dispute resolution mechanisms
  3. Assistance in representation before Commissioner of Income tax (Appeals)
  4. Dispute Resolution Panel
  5. Income Tax Appellate Tribunal Assistance in preparation of advance ruling application and representation before AAR Assisting
  6. Counselling
  7. Preparing
  8. Representing appeals and
  9. Petitions before High Courts and Supreme Court.