The high court may issue a writ to release an assessee from illegal detention by the officer concerned. The court will interfere by way of writ if the action is mala fide or arbitrary or does not comply with the statutory requirement. A writ petition acts as an effective tool in the legal system of India, leading to speedy redressal of the grievances of taxpayers and coming to the rescue of them as an overstepping authority in the case of injustice caused by the authorities. The taxpayer need not pay the whole amount of tax in dispute before bringing a claim before the court and can apply for a stay in respect of the demand raised by the tax authorities.

Where the privacy of taxpayers is violated, there lies effective remedy in the Constitutional Courts. The information exchange between taxpayers and their legal advisors, which includes commercial information, business secrets and professional advice, is protected from disclosure through attorney–client privilege under the Indian Evidence Act 1872. Goods and services tax (GST) is leviable on taxable supply of goods or services, or both.

1. The stay is granted by the tax authorities either on the complete amount of the tax demand or on deposit of a percentage of the amount of tax in dispute, which in the case of income tax is 20 per cent for the first appellate authority, depending upon the circumstances.
2. The Income Tax Department’s Tax Return Preparer Scheme (TRPS) is to assist small and marginal taxpayers in preparing and filing their…
3. If any third party fails to furnish in due time any information, statement or other document as required by the tax authorities, then the tax authorities have an option to impose a penalty on such person for their failure to comply with the directions of the authorities.
4. These documents can be asked for by the tax authorities during the review of the tax return, and the taxpayer is under legal obligation to present them.
5. The Union Territory Goods and Services Tax Act 2017 (UTGSTA) and various state GST Acts are formulated for levy of Goods and Services Tax (GST) on intra-state or union territory supply of goods, services or both in the respective union territory or state.
6. As matters stand, there are between 120,000 and 140,000 cases pending before the Income Tax Appellate Tribunal and other tax tribunals on tax disputes.

Q7. How does CBDT help in reducing tax evasion?

1. These changes are meant to make taxes simpler, encourage people to follow the rules, and make India’s tax system match those of other countries.
2. Our tax legal team has a great deal of experience in varied range of tax issues, from complicated cross-border transactions to tax exemption qualification.
3. Tax rates for individuals range between 10 percent and 30 percent depending on the tax slab in which the total income of the assessee falls.
4. The taxpayer need not pay the whole amount of tax in dispute before bringing a claim before the court and can apply for a stay in respect of the demand raised by the tax authorities.
5. A decision of the high court, which presents a substantial question of law, or deals with questions upon which there are conflicting decisions of the High Court, may be appealed against before the Supreme Court.
6. The CBDT is headed by a chairman and also comprises six members, all of whom are ex officio special secretaries to the government of India.

The Indian tax authorities also cooperate with tax authorities in other countries to share information. India has entered into a few double tax avoidance agreements, tax information exchange agreements, free trade agreements, progressive trade agreements and comprehensive economic partnership agreements with other jurisdictions. There has been an increasing focus on sharing of information between Indian tax authorities with their foreign counterparts on tax avoidance.

Supporting Government Welfare Programs

However, it is very uncertain whether similar schemes will be launched in the future. Likewise, there are no specific amnesty programmes provided in the indirect tax laws. However, the benefit of a reduced quantum of penalty can be availed if the tax and interest short paid are paid voluntarily within a specified time frame. Under GST laws, the information shared between taxpayer and lawyers is protected by attorney-client privileges guaranteed under the Indian Evidence Act 1872. Also, as per the indirect tax laws, the tax authorities are empowered to enquire about and request any document or information whether it is confidential or not.

The tax department also obtains the required information from foreign tax authorities to conduct an effective assessment. Such an exchange of information can be upon specific request by the other country under the tax treaty. A Dispute Resolution Panel (DRP) is a mechanism that applies to Indian companies where the tax authorities have proposed adjusting the arm’s-length price. The direction from DRP is required to be passed within nine months from the end of the month in which the draft order is forwarded to the taxpayer by the tax officer. Such directions issued by the DRP are binding on the tax officer, who is required to pass the final order based on such directions, which is appealable directly before the second appellate authority. CBDT’s efficient collection of direct taxes, including income tax and corporate tax, plays a crucial role in financing India’s development projects, infrastructure, and welfare programs.

The CBDT was officially created under the Central Boards of Revenue Act of 1963, but its history goes back even further. In 1924, a Board of Revenue was set up to make tax collection more efficient in British India. After India gained independence, this board was split into two parts, one dealing with direct taxes and the other with indirect taxes, which eventually led to the formation of the CBDT. Assessment is done to ensure correct estimation of total taxable income of an assessee (i.e. taxpayer) and it determines amount of tax to be payable by (or to be refunded to) assessee. Most income tax returns filed are processed by the Centralised Processing Center in Bengaluru26 on the basis of the information provided by the taxpayer. Such automatic processing of returns is called as “summary assessment” and is carried out in accordance with sub-section (1) of section 143 of the Income Tax Act, 1961.

Who is the current chairman of Central Board of direct tax?

In its quest for information, the tax authority can in specified circumstances resort to the rather intrusive procedure of a survey at the business premises of the taxpayer. Penalties cannot be imposed on the taxpayer if the taxpayer is able to prove that he or she was under a bona fide belief that there is reasonable cause for the failure. Under the GST laws, the penalties are calculated as a percentage of the tax amount due to be paid to the government. Depending on the nature of contravention or violation, the penalty amount ranges from 10 per cent of the tax amount to an amount equal to the tax due, namely, 100 per cent of the tax amount.

As a result, the then existing three rates of excise duty, namely 8 percent, 16 percent and 24 percent were converged into a uniform rate of 16 percent. The provisions of the Income Tax Act are also oriented to promoting the public purpose of economic development. Further there is concessional rate of taxation for income from exports and tax incentives for the establishment of industries in areas notified as backward or underdeveloped. Tax trials are conducted by numerous jurisdictional tax authorities across the country as per the subjective administrative convenience and the time limits laid down in law. As there is no formal court conducting the trial, there is no formal case management process for a tax trial. The tax authority, while conducting the trial, is bestowed with immense powers to call for information as well as personal presence.

Taxpayer Facilitation Centers

India does not accept a mandatory binding arbitration mechanism specifically for tax disputes on grounds of sovereignty. In addition to the above, the tax authorities have the power to issue a summons, and they have the same powers as those of a civil court trying a suit. Such powers include discovery and inspection, enforcing the attendance of any person (including any officer of a banking company) and examining him or her on oath, compelling the production of books of accounts and other documents. The exchange of information is primarily meant to determine if there is a case of tax evasion or tax avoidance by the taxpayer.

Importance of CBDT in Indian Tax System

More advanced portals, mobile applications, and AI-powered tools for filing and compliance. The taxes collected by CBDT fund critical government welfare programs like PM Awas Yojana, MNREGA, and PDS, directly impacting millions of Indians. CBDT provides a robust grievance redressal system through platforms like e-Nivaran, where taxpayers can raise concerns and track resolutions online. CBDT is actively involved in regulating transfer pricing to prevent tax evasion through cross-border transactions.

The CBDT works very closely with the Ministry of Finance on many financial issues, especially when preparing the national budget. Recently, programs like the Vivad se Vishwas Scheme have successfully settled many long-standing tax disagreements. The department can survey any business premises during the time such place is open for business for the cbdt is a statutory authority functioning under the physical verification of records and other valuables. Section 133A of the Income Tax Act 1961 provides the department to conduct surveys. There are 10 specialised directorates within the Income Tax Department, most extensive and famous among these being Directorate of Investigation. A sales tax of 4 percent is charged when the transaction is between two registered dealers whilst sales tax of 10 percent is charged in all other cases.

The Aadhaar card  is used by the Indian government to offer its citizens a number of services. Through initiatives like faceless assessments, e-filing portals, and digital grievance redressal mechanisms. Circulars focused on digital taxation, clarifications on deductions under various sections, and corporate tax reforms. With initiatives like e-invoicing and GSTN integration, CBDT is moving toward a more digital tax ecosystem, ensuring ease of doing business and faster compliance. CBDT is focused on emerging trends such as artificial intelligence, big data, and blockchain to make tax administration more efficient and transparent.