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Home > Country profiles > India > Articles > Article detail

Alternate dispute resolution mechanism expected in new tax code

Sunday, 19th August 2019

"The new Direct Tax Code to be submitted on August 16 by the committee headed by Principal Chief Commissioner of Income Tax Akhilesh Ranjan will have, among other things, an alternate dispute resolution mechanism, said a person privy to the discussion of committee.

As per the draft tax code, if a person gets a (tax) demand order on account of 20 items, the assessee has a choice that of the 20 items if he agrees on ten, he can pay the tax on those ten items, and get exemption from paying any interest or penalty.

The items on which the assessee does not agree, he can go for a negotiated settlement. The negotiation will happen on the basis of how many cases the department wins in appeals. Say, if the department has on an average won 20 per cent cases in appeals, the department would ask the assessee to pay 20 per cent of the demand and settle the case. If a negotiated settlement is reached, the assessee will only have to pay the tax and interest and no penalty.

If one does not agree with everything (the tax department disputes), he can part agree and part litigate. Even if the assessee loses in appeal, he can still have an opportunity to settle the case."

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Language: English
Contact: Dipak Mondal

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