Tax Advisory & Litigation
Tax practice concerns compliance with, and disputes arising under, India's direct and indirect tax legislation, together with the tax consequences of commercial transactions. Sagar & Sagar Law Offices advises on income tax, goods and services tax, customs and transfer pricing matters, and represents taxpayers in assessment, reassessment, audit and investigation proceedings, and in appeals before appellate authorities, tribunals, the High Courts and the Supreme Court of India. The practice covers both preventive advisory at the transaction stage and contentious work once a demand is raised.
Overview
Tax exposure in India ordinarily crystallises long after the transaction that produced it. An assessment may be reopened years later, a classification adopted at the outset may be questioned on audit, and a position taken in one statute may be examined for consistency under another. The record created at the time of the transaction — the documentation, the disclosure, the contemporaneous rationale — usually determines the outcome of the dispute that follows.
The practice at Sagar & Sagar Law Offices operates on both sides of that timeline. Advisory work addresses the tax treatment of transactions, structures and arrangements before they are implemented, and the documentation required to support the position adopted. Contentious work covers responses to notices, representation through assessment and audit, and appeals through the statutory hierarchy. Where a tax matter carries a penalty or prosecution dimension, the position is coordinated with the firm's White Collar Crime & Financial Crime Defence practice.
Scope of work
Direct tax advisory
Advice on income tax treatment before positions are taken.
- Advice on taxability of income and on characterisation of receipts
- Advice on allowability of expenditure and on disallowances
- Advice on capital gains, including on cost of acquisition, indexation and exemptions
- Advice on the tax treatment of business reorganisations, mergers and demergers
- Advice on withholding tax obligations on domestic and cross-border payments
- Advice on tax treatment of employee compensation and share-based arrangements
- Advice on presumptive taxation and on regimes applicable to specified taxpayers
- Advice on tax treatment of trusts, charitable institutions and non-profit entities
- Opinions on tax positions for audit, accounting and disclosure purposes
Direct tax assessment, reassessment and dispute
Proceedings once the revenue authorities take up a matter.
- Representation in scrutiny assessment proceedings, including under faceless procedures
- Responses to notices proposing reassessment and to the preliminary enquiry preceding them
- Objections to reopening of assessment and challenges to jurisdiction
- Representation in search and survey proceedings and in consequential assessments
- Representation in penalty proceedings
- Advice on and applications for stay of demand and recovery
- Rectification, revision and appeal effect proceedings
- Applications for waiver and for settlement, where available under the applicable framework
- Advice and representation where prosecution is proposed under the tax legislation
Direct tax appeals
Challenges through the statutory appellate hierarchy.
- Appeals before the Commissioner of Income Tax (Appeals)
- Appeals before the Income Tax Appellate Tribunal
- Appeals before the High Courts on substantial questions of law
- Appeals and special leave petitions before the Supreme Court of India
- Writ proceedings before the High Courts where the statutory remedy is inadequate
- Representation before the Dispute Resolution Panel, where applicable
- Advice on cross-objections, stay applications and condonation of delay
Transfer pricing and international tax
Cross-border and related party taxation.
- Advice on arm's length pricing of international and specified domestic transactions
- Advice on selection and application of transfer pricing methods
- Transfer pricing documentation, including local file, master file and reporting requirements
- Representation in transfer pricing assessment and before the Transfer Pricing Officer
- Transfer pricing appeals and representation before the Dispute Resolution Panel
- Advice on advance pricing agreements and on the process for concluding them
- Advice on mutual agreement procedure under applicable tax treaties
- Advice on permanent establishment exposure and on attribution of profits
- Advice on availability of treaty benefits and on documentation supporting them
- Advice on anti-avoidance provisions and on their application to specific arrangements
- Advice on taxation of digital and cross-border services
Goods and services tax
Advisory and contentious work under the goods and services tax legislation.
- Advice on registration, place of supply and time of supply
- Advice on classification of goods and services and on applicable rates
- Advice on valuation, including related party and cross-charge transactions
- Advice on eligibility, availment and reversal of input tax credit
- Advice on export, zero-rated supply and refund entitlements
- Preparation and filing of refund applications and representation in refund proceedings
- Responses to departmental audit observations and to notices seeking information
- Responses to show cause notices and representation in adjudication proceedings
- Appeals before the appellate authority and before the appellate tribunal
- Writ proceedings before the High Courts arising from goods and services tax action
- Applications before the Authority for Advance Ruling and appeals therefrom
- Advice on obligations of electronic commerce operators and on collection at source
- Advice on transitional and legacy issues arising from the earlier indirect tax regime
Customs, foreign trade and legacy indirect tax
Duties on import and export and the frameworks surrounding them.
- Advice on classification of imported and exported goods
- Advice on customs valuation, including related party transactions and special valuation
- Advice on exemption notifications and on conditions attaching to them
- Advice on duty drawback and on export promotion schemes
- Representation in investigations by customs and revenue intelligence authorities
- Applications for provisional release of seized goods
- Responses to show cause notices and representation in adjudication
- Appeals before the Customs, Excise and Service Tax Appellate Tribunal
- Advice on penalty and confiscation proceedings
- Legacy proceedings under central excise and service tax legislation
- Advice on trade remedy measures and their application
Tax in transactions
Tax input into commercial transactions as they are structured.
- Tax due diligence in acquisitions and investments
- Advice on tax-efficient structuring of acquisitions and disposals
- Tax indemnities, warranties and covenants in transaction documentation
- Advice on tax consequences of schemes of arrangement
- Advice on tax treatment of debt restructuring and of resolution under insolvency proceedings
- Advice on stamp duty implications of transaction documents
- Advice on tax aspects of fund structures and of distributions
- Advice on withholding and reporting obligations arising on completion
Forums and authorities
- Assessing officers and appellate authorities under the income tax legislation
- Income Tax Appellate Tribunal
- Dispute Resolution Panel
- Transfer Pricing Officers
- Goods and services tax authorities, appellate authorities and the appellate tribunal
- Authority for Advance Ruling and the Appellate Authority for Advance Ruling
- Customs, Excise and Service Tax Appellate Tribunal
- Directorate of Revenue Intelligence and Directorate General of GST Intelligence
- High Courts, in appellate and writ jurisdiction
- Supreme Court of India
- Competent authorities under tax treaties, in mutual agreement procedure
Who we act for
- Companies and limited liability partnerships
- Banks, non-banking financial companies and financial institutions
- Foreign companies with Indian operations or income
- Indian companies with cross-border transactions
- Investment funds and their portfolio entities
- Promoters, directors and individual taxpayers
- Trusts, charitable institutions and family entities
- Importers, exporters and manufacturers
- Parties to transactions requiring tax structuring input
How we approach this work
Documentation prepared at the time of the transaction.
The contemporaneous record generally determines the outcome of a dispute years later. Advisory work includes settling the documentation that will support the position when it is examined.
Jurisdiction examined before merits.
In reassessment, recovery and adjudication matters, whether the authority has validly assumed jurisdiction is assessed before the substantive position is argued.
Appellate record built from the first response.
Facts and contentions are placed on record at the earliest stage, since appellate forums are ordinarily confined to the record made below.
Awareness of penalty and prosecution exposure.
Tax positions can carry consequences beyond the demand itself. Where that exposure exists, it is identified when the position is taken rather than when proceedings are initiated.
Frequently asked questions
- What should a taxpayer do on receiving a notice proposing reassessment?
- A notice proposing reassessment ordinarily requires a response within the period stated, and the response forms part of the record for all subsequent proceedings. The taxpayer's position on jurisdiction, on the material relied upon and on the merits should be placed on record at that stage. Objections to the assumption of jurisdiction are ordinarily raised before the assessing authority before any challenge is carried further.
- What is the appellate hierarchy in direct tax matters?
- An order of the assessing authority is ordinarily appealable to the Commissioner of Income Tax (Appeals), and thereafter to the Income Tax Appellate Tribunal. An appeal from the Tribunal lies to the High Court on a substantial question of law, and from the High Court to the Supreme Court of India. In specified cases, a taxpayer may proceed before the Dispute Resolution Panel instead of the first appellate authority.
- What is transfer pricing and when does it apply?
- Transfer pricing provisions require that international transactions between associated enterprises, and specified domestic transactions, be conducted at arm's length, and that the taxpayer maintain prescribed documentation supporting the price adopted. Where the authorities consider the price not to be at arm's length, an adjustment may be made to the income of the taxpayer, subject to appeal.
- What is an advance pricing agreement?
- An advance pricing agreement is an arrangement between a taxpayer and the tax administration determining, in advance, the arm's length price or the methodology for determining it in respect of specified future transactions. It provides certainty for the period covered and may in specified circumstances be applied to earlier years, subject to the conditions of the applicable scheme.
- How is a GST show cause notice dealt with?
- A show cause notice sets out the demand proposed and the basis for it, and requires the taxpayer to show why the demand should not be confirmed. A reply is filed within the period allowed, supported by documents and by the legal position relied upon, followed by personal hearing. The adjudication order that follows is appealable to the appellate authority and thereafter through the statutory hierarchy.
- When can input tax credit be denied?
- The goods and services tax legislation makes availment of input tax credit subject to conditions, including possession of a valid tax invoice, receipt of the goods or services, payment of tax to the government by the supplier, and filing of the prescribed returns, together with express restrictions on credit in specified cases. Disputes commonly arise from supplier default, classification and use of inputs for exempt supplies.
- Can a High Court be approached directly in a tax matter?
- Writ jurisdiction is ordinarily exercised sparingly in tax matters where a statutory remedy exists. Courts have entertained writ petitions in circumstances including want of jurisdiction, breach of natural justice, and challenges to the vires of a provision. Whether the writ route is available depends on the nature of the grievance rather than on the convenience of the taxpayer.
- Does a tax dispute expose a taxpayer to prosecution?
- The direct and indirect tax statutes contain penalty provisions and, separately, provisions for prosecution in specified circumstances involving wilful conduct. Not every demand carries such exposure. Where the allegations involve concealment, evasion or falsification, exposure under other legislation may also arise and is assessed alongside the tax position.
Related practice areas
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