Tax Litigation: Meaning, Process, Stages And Tips

key takeaways 
 

• Tax litigation is used to resolve all the issues and disputes between taxpayers and government departments. 
   
• Primary focus in dispute is always on outside court settlement after this ITAT, High Court, and Supreme Court; pre-deposit comes in frame.
   
• Tax litigation is one of the fields which will not be affected by AI much, so becoming a tax litigation lawyer can be the wise decision.

Bonus tip - The CBDT has increased the minimum amount for filing appeals in the Income Tax Appellate Tribunal from ₹20 lakh to ₹50 lakh.

What is tax litigation?

Do you know about tax litigation? Let me tell you about this. When citizens file for tax everything doesn't go right. Many times people face some penalties for non-compliance, there are many payment and tax liability issues. In such cases disputes can be raised between tax payers and government authorities. 

Tax litigation is the process of resolving these cases. It is a legal process that used to dispute over tax and GST. This involves employment tax, estate tax, income tax, and gift tax. These cases can be categorised into civil or criminal. 

Tax litigation helps in individual and partnership matters, charitable and non-profit making institutions, management expanses, etc. 

These matters reaching the supreme court are not normal tax cases, they are only based on questions of law. 

Categories of tax litigation 

Tax litigation is divided into civil and criminal categories based on the nature of tax-related disputes.
 

Understanding these categories helps in identifying the legal process and consequences involved in different types of tax matters.

Types of tax litigation

There are two types of taxes in India: direct tax and indirect tax. According to this litigation is filed when a dispute arises. 

Direct tax litigation 

In direct tax litigation cases related to corporate, capital gain, property and income are handled. These cases are managed by the Central Board of Direct Taxes (CBDT). In direct tax litigation cases are mainly around non-payment, differing interpretations of tax law, and incorrect computation. You can enter direct tax litigation jobs and start working as litigators for companies and businesses. 

Indirect tax litigation 

Cases related to the service, excise, VAT, customer duty, stamp duty, security, and entertainment are handled in direct tax litigation. In India these disputes are especially related to the goods and services tax (GST). 

Importance of Tax litigation law firms

Tax litigation law firms resolve disputes between taxpayers and the government. In India there are many such working tax litigation law firms. Here are some of India's well known tax litigation law firms.

These law firms help solve tax disputes and guide people in handling tax-related legal problems easily.

How to become a tax litigator? 

Companies and businesses often need a tax litigation lawyer for handling disputes and filing tax. This is one of the best opportunities for finance and law students to become tax litigators. To become a tax litigation lawyer you can enroll in the following income tax litigation course.

• Diploma in Insurance and Risk Management (DIRM)
   
• Certificate Course on Labour Laws
   
• Certificate Course on GST
   
• Certificate Course on Real Estate - Laws and Regulations
   
• Certificate Course on Estate & Succession Planning
   
• Certificate Course on Business Responsibility and Sustainability Reporting (BRSR)
   
• Certificate Course on Arbitration
   
• Certificate Course on Real Estate - Laws and Regulations.
   
• Certificate Course on Fundamental & Technical Analysis Of Stocks Including Equity Research

These courses are offered by (ICAI)The Institute of Chartered Accountants of India.

Conclusion 

Taxpayers often face issues from government tax departments, similarly some taxpayers face expenses, datas, and income to reduce income tax. In such cases disputes can arise between taxpayers and the tax department. To resolve such cases tax litigation helps. Students from a law background can go for tax litigation jobs.

FAQs 
 

How to deal with a Section 148A(b) notice for a 6-year-old transaction?

First of all, you should identify what is the issue and then collect all the documents like bank statements, sale deeds, ITR of that year. If the mistake is yours you should accept the notice and pay a penalty, if not then you can get help with tax litigation. 

Should I reply to a 143(2) scrutiny notice myself or hire a CA?

You can notice yourself only if this is salary income matter or simply case. You should hire a CA if this is previous notices, business income, cash transactions, or large deductions.

Continuous GST notices-should I just close my company?

Closing companies will not remove notices, penalties, or past GST liabilities instead you should identify the problem. See what mistakes you made like wrong filings, or  fake ITC, accountant issues. Then file pending returns or respond to notices properly. Then you can decide if closer is needed or not.

What to do if the CIT(Appeals) rejects my appeal without a hearing?

If CIT rejected your appeal without a hearing, you can file an appeal to ITAT (Income Tax Appellate Tribunal). You can mention the issue there.